The End of Politics: a review

I stumbled across Chris Dillow's blog (entitled Stumbling and Mumbling) after reading repeated references to managerialism in The Yorkshire Ranter and DSquared Digest.

A brief read of Dillow's blog suggests he is clearly too clever by half and, which is more, he knows that intelligence is irrelevant if you don't pay attention to empirical observations, or further are incapable of making accurate empirical observations.

Which leads into The End of Politics - Dillow's book.

Dillow's thesis is that, contrary to the standard caricature of being "all spin and no substance", New Labour does have a distinctive ideology.

This ideology holds that it should be possible to combine equality and economic efficiency, and that there is no trade-off between these two goals. Any problems that emerge can be dealt with through effective management.

Dillow calls this ideology managerialism. Managerialists believe that the job of government is to behave like managers of a company. Managerialists do not perceive the inherent trade-offs and conflicts of interest that are endemic to politics, and are indeed the reason for the existence of politics. Managerialists believe conflicts of interest can be resolved with good leadership and appeals to a well-defined national interest.

Managerialism is distinct from the scientific management of Frederick Winslow Taylor, which was concerned with organising resources effectively. Rather managerialism is the belief that there exists an abstract concept of "good management" that can be applied to every situation, regardless of the underlying organisational substrate.

Managerialists are obsessed with the idea that the world is new and constantly changing, thus simultaneously justifying managerialist action and ensuring that it is impossible to objectively test the efficacy of a managerialist policy because by the time it is implemented things will have changed.

Dillow also draws a link between Old and New Labour, describing how they are defined by their desire to achieve equality and economics efficiency simultaneously.

Dillow argues that there are trade-offs in politics that can't be managed away.

Further he argues that notions of "economic efficiency" or "equality" or even "rationality" are ambiguous and incoherent in and of themselves. He cites Newcomb's Problem to identify areas where traditional conceptions of rationality are limited.

Dillow shows that the arguments that globalisation have changed everything are false, and that concern over globalised capital and labour is as old as Adam Smith.

Instead, globalisation is used to justify New Labour's managerialist schemes.

Globalisation isn't necessarily irreversible, as the existence or non-existence of tariffs or immigration controls are at the whim of politicians.

Dillow shows that the evidence as to whether the national minimum wage destroys jobs is inconclusive, but taken as a whole, the research generally seems to indicate that the national minimum wage does destroy jobs but this is difficult to detect in aggregate economic data.

The attempts by the Beveridge-report inspired postwar settlement to achieve full employment lead to worker militancy and increased inflation, as workers campaigned successfully for higher and higher price rises in response to increased inflationary pressures that were in fact being caused by inflationary pay rises.

Dillow's arguments are a recurrent theme in what I've been reading. The Black Swan by Nassim Nicholas Taleb, The Origin of Wealth by Eric Beinhocker and now The End of Politics all have in common an empirically-supported belief that the powers of human rationality are more limited than we tend to assume. That centrally-planned projects often fail and that extensive government oversight of the economy is generally a bad thing.

So if the capacity of political leaders to manage things is inherently limited in all sorts of ways what is to be done?

The title The End of Politics is appropriate: Dillow pours flammable liquid over all the most cherished ideals of all politicians and sets everything alight.

Given the robust and thoroughly empirical nature of this book I am entirely persuaded by Dillow's arguments that most political projects are stillborn. There is never enough information for politicians to make good decisions, even if they were capable of doing so, or even had a clear idea about what qualifies as a "good" decision.

As an alternative to top-down managerialist politics Dillow argues in favour of the open society: that decision making should be as democratic as possible, simply because no centralised authority can possess all the necessary information to make good decisions.

Dillow believes hospitals should be run by doctors and nurses, and schools run by teachers, because no centralised manager in Whitehall can possibly predict "the facts on the ground."

He also suggests the intriguing idea of a citizens basic income as a way of partially solving the problem of welfare vs. working tax credits. It's an interesting idea, and one that appeals to the dilettante in me.

The basic lesson of The End of Politics is that in the complex world in which we live political and business leaders need to be more humble in the face of the inherent limitations of centrally directed institutions.

The best way to get anything done is to create the circumstances by which effective solutions can be evolved from the interactions and daily business of all the millions of people and machines in the world.

Nowadays, as professions become more and more specialised, it is important to hand control back to the professionals. Just as David Allen's Getting Things Done system was defined by Wired magazine as "Taylorism for the modern knowledge worker."

Just as the study of productivity has shifted emphasis from centrally-directed institutions to professional individuals Dillow argues that the response to increasing complexity in the world is to decentralise politics and business.

Both The End of Politics and The Origin of Wealth convey the message that economists and policy makers need to be more humble about the extent to which the economy can be controlled and that the best laid plans gang aft aglay.

Dillow advocates an open society and more genuinely democratic debate in which heterodox views and those who stand to lose out from policies are given a fair hearing. Political debate is likely to be fairer if things are done in the open.

My response to this book was initially fatalistic: if the world is so complex that we can never hope to control it, why bother attempting anything?

Dillow's answer is that government has a role in creating the circumstances in which innovation can take place. But it is not the role of government to attempt to change people or manipulate the economy, because it is incapable of doing so effectively.

In a broader context it is clear that our conception of human nature is changing and altering. We are coming to realise that we are not wholly rational, and even that rationalism itself is a canard.

Dillow has an excellent blog: Stumbling and Mumbling.