Thursday, 31 May 2007

Why we suffer such terrible, inept government

My blogging life has two dominating themes:

1) bringing interesting Times articles to a largely Guardian/Independent reading audience,
2) commenting on yesterday’s news (often because by the time I’ve written it up it is too late to post it on the day and so I leave it to the following lunchtime to post).

On Wednesday, Chris Dillow wrote a provocative piece on why we put up with terrible, inept government (though actually he had a lot more to say about why government was terrible than why we put up with it). He comes to the shocking conclusion that ineptitude is the inevitable consequence of government (Well, you could have knocked me down with a feather!).

He cites four lines of research that suggest this:

  • F.A. Hayek’s (we’ve met him before!) view that information is inherently dispersed and no single person or small group can know as much or be as well informed as the millions of individuals working for their own (enlightened) self-interest;
  • Research into “Cognitive Bias” that has given us a list of common blunders that one might recognise from government (Groupthink is strangely missing, as is the “Fear-of-Brown effect”);
  • Transactions-cost economics, from which we learn that economies of scale are not the only possible outcome of horizontal and vertical integration, so that sometimes it is more efficient to contract out certain operations (human resources, manufacturing the constituent parts of a whole) than to do everything in-house and direct everything from on high;
  • Recent management literature suggesting that leadership and hierarchy are less effective than trust and delegation.

Dillow’s alternative to hierarchical government and the cult of leadership are certainly interesting: ‘flat-rate allowances [could be] paid to everyone rather than [operate] an administration-heavy welfare state; schools and hospitals could become worker coops; we could use demand-revealing referendums rather than look to “leadership”.’

I have argued before that the Government should limit itself to ensuring that everybody is able to access vital services, without feeling the need to provide them itself. I don’t see why schools and hospitals need to be “workers co-operatives” (it sounds like a sop to the Commies, to me!), but if some co-ops want to operate alongside, and compete with, profit making enterprises, social enterprises, charities, municipalities and whomsoever else wishes to provide services, I would welcome the diversity of provision.

However, while I remain unclear as to what he means by a “demand-revealing referendum”, if it is anything like Direct Democracy it fills me with trepidation. I would be happy if just three changes were made to society
1) A greater empowerment of individuals, from which would follow greater responsibility
2) A reduction in the size and scope of the state, which needs to learn to do less, better
3) Devolution of authority over those areas that require collective decision making to lower levels of government.

With a smaller state, stronger local government and greater individual freedom, we would be spared the gargantuan blunders of big government, would be better able to hold decision-makers to account, and would have a more real sense of responsibility over the tiny blunders that we make and suffer every day.

Mr. Dillow’s book, The End of Politics, will be added to my reading list as soon as I have read one of the two feet of books that I have outstanding on my bookshelf, and can thus lift the moratorium on new book purchases that I have unilaterally declared. Others may wish to read it sooner.

No comments: