The epistemological failings of the state
A couple of weeks ago the RSA was contacted by Rohan Silva, a senior Downing Street special advisor and asked at short notice to hold an event featuring Nassim Nicholas Taleb. The event was packed out and Rohan as chair was at pains to emphasise the powerful influence of Taleb’s ideas on Government thinking. In essence Taleb’s argument – based on a fascinating, but occasionally somewhat opaque, mixture of philosophy, statistics and metaphors – is that big systems are much more prone to catastrophic failure (or in some cases sensational success) than small devolved ones. From bankers to planners to politicians, a combination of ignorance, complacency and self-interest leads to a systematic underestimation of the inherent risk of large complex systems.
On Monday the RSA jointly hosted an event with OFSTED to discuss our report on satisfactory schools. In the course of the conversation a different Government special advisor was asked about the idea that a national agency – perhaps OFSTED, perhaps the National College for School Leadership – might be tasked with helping schools that were finding it difficult to move above satisfactory status. In expressing opposition he said he had very little faith in national strategies overseen by national agencies. Instead, he said, we should rely on a combination of devolved governance and greater public accountability to drive improvement. Yes, there would be some schools which would fail to improve but this was also true of a top-down national strategy and the latter approach had many other adverse externalities ranging from cost to stifling innovation.
In interpreting Government policy it is important to understand the right’s epistemological critique of the state. From this perspective the size, complexity and reflexivity of the modern world make it impossible for state planners to be able to predict accurately how their interventions will impact. Unintended consequences are inevitable but instead of planners learning from their mistakes, these consequences simply provide the pretext for more interventions leading to an ever more intrusive state and an ever less free society.
Taleb applies this idea to the modern financial system arguing that its size and complexity makes it inevitable that it will be subject to extreme events (black swans). Corporate bankers and state regulators, who have a vested interest in maintaining the system fundamentally as it is, connive to pretend that risk can be abolished.
Scepticism and hostility towards big state planning goes way back in right of centre thinking and has had powerful exponents including Hayek and Oakeshott. Team Cameron see Taleb as the Oakeshott of the twenty first century.
These ideas are commonplace among right of centre thinkers, but Conservative politicians tend not to put so much emphasis on them in public, perhaps because they are seen as overly intellectual or vulnerable to being portrayed as extreme. I sense this is changing.
There are two obvious reasons why ministers might feel more empowered to reveal that their scepticism towards the state is philosophical as well as pragmatic. First, while the emerging data on Labour’s record in improving economic and social outcomes is more positive than the current public view, there is no doubting that most votors think the New Labour’s statist experiment failed. Second, austerity gives philosophical predisposition the impetus of practical necessity. Many of the public entitlements which Labour used the state to guarantee are simply unaffordable.
But regardless of the economic cycle, the right’s theory of social knowledge is also strengthened by the ever greater complexity of the modern world. If Oakeshott thought national planning was bound to fail in the more ordered, slower moving, more deferential world of the late 1940s imagine how futile he would see it as being today.
If the right does become more intellectually explicit it will face some challenging questions. Here are just two: why is a democratically accountable and relatively weak organisation like a local education authority portrayed by ministers as the kind of overbearing power that needs to be broken up while Tesco (to take just one example) is left free to grow even more powerful and major Academy chains, massive welfare to work providers and various other large scale private sector providers are encouraged? Second, given that Government has to govern, how can we distinguish between national policy which reflects an understanding of the limits of state knowledge and efficacy and that which doesn’t? I heard this morning that the Autumn Statement contained twenty announcements on policy in the FE sector alone; were these all about lifting the burden of state interference?
In the immediate context of austerity much debate is about what welfare and which public services can be afforded. But the gap between what we aspire to and what we can afford is likely to grow over the long term as is the complexity of society. So we should also welcome the right’s invitation to a more fundamental debate about the kinds of things the central state can and can’t do (should and shouldn’t) do.
Comments
7 Comments on The epistemological failings of the state
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Julian Dobson on
Wed, 14th Dec 2011 6:16 pm
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Ian Jones on
Wed, 14th Dec 2011 6:42 pm
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Matthew Cain on
Thu, 15th Dec 2011 1:48 pm
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Will Davies on
Thu, 15th Dec 2011 5:05 pm
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Falco on
Thu, 15th Dec 2011 6:47 pm
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Tony Holmes on
Sat, 17th Dec 2011 11:56 am
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Colin Talbot on
Mon, 19th Dec 2011 7:25 pm
I’m not sure it’s entirely correct to characterise the critique of big state/big systems as an ideology of the right, though clearly it can be used to fit and justify the narrative of cutting public spending. It has also been a strong thread through the cooperative movement and green thinking, as well as in many parts of the liberal centre.
I think the real issue is the one you highlight in the LEA/Tesco question: if human-scale thinking and systems are to be pursued, why direct the critique solely at the state when, arguably, unaccountable multinational businesses have far more influence over our everyday lives?
Mathew I would question that this thinking is right of centre, it is derived from science and complex systems, panarchy and of course in the wiritings of the likes of Prince Peter Kropotkin, Pierre-Joseph Proudhon or Max Stirner.
Another challenging question for devolution is the dislike of a ‘postcode lottery’. When something goes wrong, Ministers are usually held – and often encourage the sense – that they are personally responsible (cf. Ed Balls, Haringey). Doesn’t devolution also require politicians to do an abnormal thing and admit that they can’t control everything? And if they do are we, the public, prepared to accept that?
This is a very interesting debate. It’s worth remembering that both Hayek and Schumpeter were very pessimistic about the capacity for policy-makers to resist planning, because to do so they needed to side with socio-economic forces (competition, creative destruction) that are abstract and only produce benefits in the long-term. It is difficult to go on Newsnight and justify things in abstract, long-termist language. By contrast, it’s much easier to do so by using empirical evidence and predicted outcomes.
On the other hand, someone like Hayek was firmly wedded to interventionist rule of law (at least he was during the 1930s, 40s and 50s). Government has a central role in creating the architecture or order of the free market economy, using law, regulation and the judiciary. This is precisely the tradition of neoliberalism that now needs reviving, to break the power of the big banks. It would be interesting to see if Rohan Silva or anyone else around Number 10 or Number 11 is prepared to read the Austrian neoliberals (or Schumpeter), for lessons in relation to the power of the City of London. I don’t understand why governments don’t create more legal forms for companies to take, or create the legal conditions of new types of market. There is no obligation for anyone to use them – but it offers the possibility for greater diversity of business practices, with governments creating a menu of legal templates for the economy.
Andrew Haldane has rightly focused on limited liability as a legal precondition of the financial crisis. This is a way of thinking that is both Hayekian and crucially important at the moment. But the government has been entirely silent on the legal forms and protections underpinning the City’s power.
” why is a democratically accountable and relatively weak organisation like a local education authority portrayed by ministers as the kind of overbearing power that needs to be broken up while Tesco (to take just one example) is left free to grow even more powerful”
Perhaps it has seemed too obvious to previous commenters to mention but for the love of god, “IT’S BECAUSE YOU CAN CHOOSE WHETHER OR NOT TO SHOP AT TESCO BUT NOT WHERE TO SEND YOUR KIDS TO SCHOOL UNLESS YOU HAVE ENOUGH TO PAY BOTH THE TAXES AND PRIVATE FEES ON TOP OF THAT.”
Shouty caps very much intended. If you don’t like Tesco, go elsewhere. If you don’t like your local authority, ether move, (with the fun and expense of that process) or just suffer it. I cannot understand how anyone can honestly ask the question you do above.
Not everybody thinks highly of Taleb….
As the late Herbert Simon said, we do not live in a society of markets, but of markets and organisations. Private organisations have some similarities with their public sector counterparts, but also major differences – especially of purpose. One exists to pursue public interests, the other private. Each has strengths and weaknesses – a ‘good society’ requires a balance of markets, public and private organisations. Absolutist arguments that only one form is ‘best’ an the others should all be done away with are ridiculous – and actually not defended in practice by anyone other than extremists. In reality people like the Coalition, and Labour, often use ‘absolute’ arguments to justify what are actually simply rebalancing policies – a bit more market or a bit more public organisation.
My own view is based on evolved human nature being inherently paradoxical – and hence human organisations need to accommodate these (permanent) tensions – partly by balancing different sorts of organisations against each other. Another characteristic of absolutist thinking is its failure to recognise contradictions and paradoxes in human behaviour – e.g. humans are ‘only’ rational utility maximisers, not ALSO irrational and selfless.
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