A lucid book[1]
by the epistemologist Oliver Schlaudt
(Heidelberg U) shows how fact-focused policy advice can undermine democratic
decision-making. Performance indicators and rankings are "political
numbers", they supposedly stand for rational decision-making. However,
prior political judgements and dubious assumptions usually determine the
mechanism by which a society that believes in numbers constantly nurtures the
illusion that politics is basically superfluous.
This is particularly evident in the case of
international organisations such as the IMF, OECD or World Bank, which are
particularly far removed from political control mechanisms, or in the case of
think tanks financed in a non-transparent manner. Such institutions are all too
happy to ride their political agenda. From the perspective of principal-agent
theory, two specific problems make it difficult to control international
organisations: the long chain of delegations from voters to heads of
government, and the common-agency problem[2].
Andreas
Schleicher, OECD Director for Education and Skills
and well-known as founder and coordinator of the Programme for International
Student Assessment (PISA) studies, once coined the phrase: "Without data,
you are just another person with an opinion". Many found this slogan
smart. Me too. On closer inspection, however, it is not just arrogant. The
motto is misleading, even dangerous. For it nurtures the illusion that
essential political issues (not only education policy) are determined by 'facts'.
So policy advisors like to adorn their recommendations with the word
"evidence-based". Parliaments, the press and politicians should
better bow to the rule of experts as a result.
No doubt, a policy that believes it can do
without scientific advice is 'blind' policy (as often embodied by the 45th
President of the USA). Politics has a liability to consult research. It is
therefore preferable that politics defines targets and goals first, then seeks
(hopefully not only) scientific advice on the adequate means. The other
extreme, however, in the field of economic policy can be labeled econocracy[3].
Schlaudt lists three dangers of purely science-based policy, of which I would
like to give the following concrete examples:
·
Interference and encroachment: Economists
act as disguised lobbyists - politicians without a mandate. In Germany, these
include Bernd Raffelhüschen (U Freiburg) or Bert Rürup (Handelsblatt),
advocating the funded pension system. Although funded schemes are not superior
to the pay-as-you-go system[4],
they represent a lucrative business for financial intermediairies. The
combination of academia and lobbying (often with the help of think tanks) for
the benefit of private sponsors and at the expense of the statutory pension was
exposed wonderfully in the 2014 satirical ZDF show 'Die Anstalt'[5].
·
Futility thesis: According to Schlaudt, there is a danger that the dynamics of the feasible will
overrun the discourse on what is desirable. Albert
O. Hirschman called this the futility thesis, one of the three basic
figures of reactionary thought (along with the perversity thesis and the
jeopardy thesis)[6].
Hirschman's futility thesis holds that attempts at social transformation will
be unavailing, that they will simply fail to "make a dent.". As an
example Hirschman quotes Vilfredo Pareto
who, referring to uniform international evidence on personal income
distribution, argued that redistribution policies were ineffective.
·
Political negation: The most aggressive
encroachment of econocracy denies political decisions the right to weigh in. In
order to counter the alleged inflationary bias of politicians – notably in
coalition governments, in federal states or in politically highly polarised
countries - economists have advocated central bank independence[7].
Monetary policy has been removed from politicians´ authority in those countries
that have granted their central bank independence by statute, law or even
constitution. Budget policy should also submit to the rule of experts, if it
were up to the conceptions of some economists[8],
although budget decisions are prime political responsibility.
In terms of personnel policy, the
appointment of Janet Yellen, the former head of the Federal Reserve, as
Secretary of the Treasury has just done so in the USA. Accordingly, the
enthusiasm of the leading (Keynesian) 'experts' was unanimous. A contrary path
was taken with the election of Christine Lagarde, the former French Finance
Minister, as President of the European Central Bank. Perhaps unsurprisingly,
she remains more a politician (who is occasionally accused of overstretching the
ECB's mandate in terms of gender and environmental policy) than a central banker.
At the beginning of the 20th century,
sociologist and economist Max Weber
examined in detail the role of experts in the process of political decision-making.
In the value judgement dispute (Werturteilsstreit)
with the historical school of economics (Kathedersozialisten Schmoller, Wagner,
or Knapp) he argued together with Werner
Sombart that it was never the task of empirical science to determine binding
norms and ideals in order to be able to derive prescriptions for practice.
Weber saw the danger of experts taking advantage of their privileged position
and media presence to take a political stand. According to Weber, politics is
about what is desirable, science about what is feasible. Only a few academics
in the social sciences limit themselves to positive analysis, though, but are
too eager to push their way into politics and the media with normative
proposals.
[1] Oliver Schlaudt (2018), Die politischen Zahlen: Über
Quantifizierung im Neoliberalismus, Frankfurt/Main: Klostermann Rote Reihe 102.
[2] Nielson, D.L. and M. J. Tierney (2003), “Delegation
to International Organizations: Agency Theory and World Bank Environmental
Reform”, International Organization, Vol. 57(2), pp. 241–276.
[3] The term belongs to the vocabulary of pluralistic economics, which
opposes in particular the dominance of neoclassical explanatory approaches. See
Joe Earle, Cahal Moran and Zach Ward-Perkins (2016), The
econocracy: The perils of leaving economics to the experts, Manchester
University Press.
[4] Robert Holzmann and Joseph E. Stiglitz (2001), New Ideas about Old Age
Security: Toward Sustainable Pension Systems in the 21st Century, World
Bank, Washington DC, January.
[5] Private Vorsorge einfach erklärt (private pensions for dummys) | Die Anstalt,
ZDF, 11. March 2014.
[6] Albert O. Hirschman (1991), The
Rhetoric of Reaction: Perversity, Futility, Jeopardy, Harvard University
Press, Cambridge MA.
[7] Jakob de Haan and Sylvester Eijffinger (2016), „The Politics
of Central Bank Independence”, De
Nederlandsche Bank Working Paper No. 539
[8] See, for instance, Barry Eichengreen, Ricardo Hausmann & Jürgen
von Hagen (1999), „Reforming
Budgetary Institutions in Latin America: The Case for a National Fiscal Council“,
Open Economies Review Vol. 10, S. 415–442.
