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You’ve just become prime minister. The public finances are in a mess, the Bank of England has stoked inflation, cutting taxes may make it worse, energy prices are through the roof, people are hurting so you can’t cut social spending, the Health Service is lengthening its waiting lists despite record budgets. What can you do? Given that you will be hearing a lot from people who do governing all day, here are ten things to remember on behalf of the rest of us – the governed:


  1. Assume all public bodies have the same goal – and it isn’t what it says on the tin. You might think the Committee for the Promotion of Postage Stamp Collections is obsessed with postage stamps, or the Sewage Treatment Works Agency is fascinated by sewage. Actually they both do the same thing: they grow their budgets. They do this by talking about the vital importance of postage stamps and sewage, yes, but building their empire, creeping their mission and employing more people is the main thing they strive to do every day. Evidence for this comes from their public pronouncements which are dominated by demands for greater budgets, and their private conversations, ditto. In all of recorded history, there is probably no instance of a quango requesting a smaller budget.
  2. Taking too long to say yes is worse than saying no. Britain has become a world champion at delay. Whether it is applying for a new passport or building a new runway at Heathrow airport, things take ever longer to do. (Not so in China.) Getting planning permission for even a new housing estate now takes longer than the second world war. More and more agencies and special interests must be consulted. This does not improve the decision-making or prevent inappropriate development or give the public a say: quite the reverse. It drives development into the impersonal grasp of big firms with one-size-fits-all solutions, unimaginative plans and teams of expensive executives devoted solely to managing these delays. In business, procrastinating can be fatal; in government, not taking a decision can be safer for your career.
  3. You will never know the good things your bad policies have prevented from happening. A trivial example: I recently enquired about introducing native wood ants into some woodland that lacked them. Finding out how to do it was not difficult, but if it required permission from Natural England I decided I would not even bother because I knew I would be lost in a bureaucratic maze for months. Fortunately, it turned out I did not need official permission and the project went ahead.
  4. If something is so unpopular you have to force it on people, maybe it’s a mistake. Remember the cautionary tale of the compact fluorescent lightbulb, a useless technology foisted on consumers at great expense by banning the competition, which greatly benefited the manufacturers and served only to delay the inevitable introduction of a much more efficient and energy-saving technology, the LED. We are making the same mistake with heat pumps.
  5. Beware crony capitalists. If you subsidise an industry or a charity, they will spend some of that money on lobbying you for more subsidies. That’s how it works: it’s a perpetual motion machine of great simplicity. The renewable energy industry is a case in point. It takes huge subsidies off the consumer to build its wind, solar and tree-burning power stations – nearly £10 billion a year currently – then uses some of that money to take out adverts, sponsor conferences, lobby ministers and place newspaper articles about how full of goodness and light its activities are.
  6. There are no experts on the future. Expertise about the present and the past is very valuable but anybody who tells you that they can predict the future performance of the economy, an epidemic or the climate beyond a very short time horizon, using mathematical models, is selling snake oil. When they get it wrong, they say ah, but the outcome was at least within the confidence intervals of our model – but so was every other outcome. So the predictions that are useful are unreliable and the ones that are reliable are useless: next winter will be colder than this summer (duh!) but next summer may not be.
  7. Innovation is not predictable. If it were it would have happened already. The mobile phone, the search engine and social media all took expert prognosticators by surprise. ‘By 2005 or so, it will become clear that the internet’s impact on the economy will have been no greater than the fax machine’s,’ said Nobel prize-winning economist Paul Krugman in 1998. ‘There’s no chance the iPhone is going to get significant market share. No chance,’ said Steve Ballmer, the chief executive of Microsoft, in 2007.
  8. It’s a bottom-up world. Civil servants think in top-down ways, as if the world was a chess game and they are moving the pieces. But it’s not like that. From the English language to the internet, the world is full of things that are, in the words of the 18th century philosopher Adam Ferguson, ‘the result of human action but not the execution of human design’. Even an aeroplane is adapted from previous designs, not designed from scratch: in that sense it is a product of evolution as much as intelligent design. Ten million people eat lunch in London on most days, choosing what to have at the last minute and never going hungry, yet there is no London lunch commissioner and it would be a disaster if there were. Politicians cannot create prosperity; they can only create the circumstances in which ideas have sex.
  9. Nobody knows how to make a pencil. Even the simplest objects are made by vast networks of collaborating specialists each with their own little bit of skill. As Leonard Read argued in his famous essay ‘I, Pencil’, somebody grows coffee to be drunk by a lumberjack whose timber gets used in the manufacture of a pencil. The knowledge of how to make a pencil from scratch does not sit inside a human head, it lies between and among human heads, in the cloud, and always has. Massive voluntary collaboration is the secret of human achievement, something those who govern us seem to forget as they order us about.
  10. The pessimists are usually wrong. When I was young, the adults said the future was bleak, just as they do today: the population explosion was unstoppable, famine was inevitable and pollution was going to shorten average lifespan. No adult said anything optimistic in my hearing. ‘The outlook for man is painful, desperate, and the hope that can be held out for his future seems to be very slim indeed,’ wrote Robert Heilbroner in a 1970 best-seller. Yet over the next half-century average human lifespan grew by five hours a day, extreme poverty collapsed from 50 per cent of the world to 8 per cent and child mortality fell by three quarters. Pessimism is the handmaid of statism. ‘The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary,’ said H.L. Mencken, presaging the pandemic.





By Matt Ridley | Tagged:  the spectator