Undercover Economist

Some things are best left to the technocrats

In case anyone needed reminding of the majestic power of democracy, Boaty McBoatface embarked upon its first mission last week. The robotic yellow submarine will explore the depths of the seas surrounding Antarctica. McBoatface may even encounter Mister Splashy Pants, a humpback whale that frequents the South Pacific.

Both names were chosen by popular vote and each, in different ways, was resisted by the organisations that decided to ask the public in the first place. McBoatface and Splashy Pants remind us that, while democracy is all very well, there’s a risk in asking the public what they think.

For all its merits, democracy has always had a weakness: on any detailed piece of policy, the typical voter — I include myself here — does not understand what is really at stake and does not care to find out. This is not a slight on voters. It is a recognition of our common sense. Why should we devote hours to studying every policy question that arises? We know the vote of any particular citizen is never decisive. It would be a deluded voter indeed who stayed up all night revising for an election, believing that her vote would be the one to make all the difference.

So voters are not paying close attention to the details. That might seem a fatal flaw in democracy but democracy has coped. The workaround for voter ignorance is to delegate the details to expert technocrats. Technocracy is unfashionable these days; that is a shame.

One advantage of a technocracy is that it constrains politicians who are tempted by narrow or fleeting advantages. Multilateral bodies such as the World Trade Organization and the European Commission have been able to head off popular yet self-harming behaviour, such as handing state protection to which ever business has the best lobbyists.

Meanwhile independent central banks have been the grown-ups of economic policymaking. Once the immediate aftermath of the financial crisis had passed, elected politicians sat on their hands. Technocratic central bankers were — to borrow a phrase from Mohamed El-Erian, economic adviser — “the only game in town” in sustaining a recovery.

A second advantage is that technocrats can offer informed, impartial analysis. Consider the Congressional Budget Office in the US, the Office for Budget Responsibility in the UK, and Nice, the National Institute for Health and Care Excellence.

Technocrats make mistakes, it’s true — many mistakes. Brain surgeons also make mistakes. That does not mean I’d be better off handing the scalpel to Boris Johnson. Better a flawed expert than a flawed amateur. Democratically elected politicians are not well placed to do technical work and neither are voters. Where democracy is not up to the job, we turn to technocracy instead.

Ultimately, democracy must trump technocracy, and it does. The Bank of England has control of monetary policy but it must aim at a target set by the chancellor, who must answer to the electorate. The chancellor, meanwhile, controls fiscal policy directly. The indirect system is working better. The monetary policy of successive chancellors has been consistent for 20 years. The fiscal policy of the incumbent Philip Hammond — raising taxes on the self-employed — did not survive a week.

But there’s a problem. Technocrats may not be too interested in politics, but politics is interested in technocrats. Successive chairs of the US Federal Reserve have been accused of treason, and (worse) being “more political than Hillary Clinton” by senior Republicans Rick Perry and Donald Trump, respectively. There is now a real sense that its independence may be under threat.

In the UK, too, Brexiters have noticed that most economic experts believe Brexit will damage the economy. Many have responded not with evidence but with smears and insults — most memorably Michael Gove’s comparison of academic economists with Nazi scientists.

The dragging of technocratic advice into the political arena has in it the makings of tragedy. I realise that sounds grandiose, but the stakes here are high. On almost any issue, logic and evidence can be eaten away once partisan polarisation takes hold.

Any democracy must debate the big political issues: how much we protect the vulnerable, the appropriate size of the state, the importance of individual freedom. But technical matters are different. How safe is the MMR vaccine? Are humans changing the climate? Does fiscal stimulus work with interest rates at the zero lower bound? Once these questions become chew toys for political attack dogs, there’s no easy way out.

It is better to keep such topics away from politics as much as possible. Complex problems cannot just be wished away. Reality cannot be fooled.

“Nobody knew that healthcare could be so complicated,” said President Donald Trump last month, while David Davis, the UK’s Brexit minister, has admitted that his department had not analysed the implications of leaving the EU without a deal.

Democratic policymaking has entered the era of Boaty McBoatface.

Written for and first published in the Financial Times.

My book “Messy” is available online in the US and UK or in good bookshops everywhere.

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