Sunday, 12 September 2010

Trust me, I'm an expert

Arnold Kling writes at Cato on The Era of Expert Failure. He notes that the growth in the use of "experts" in Obama administration is striking.
However, equally striking is the failure of such experts. They failed to prevent the financial crisis, they failed to stimulate the economy to create jobs, they have failed in Massachusetts to hold down the cost of health care, and sometimes they have failed to prevent terrorist attacks that instead had to be thwarted by ordinary civilians.
and the important point is that,
Ironically, whenever government experts fail, their instinctive reaction is to ask for more power and more resources. Instead, we need to step back and recognize that what we are seeing is not the vindication of Keynes, but the vindication of Hayek. That is, decentralized knowledge is becoming increasingly important, and that in turn makes centralized power increasingly anomalous.
Growth in what is sometimes called the "knowledge economy" is making the life of the government expert difficult to the point of impossible. The philosopher H. B. Acton wrote back in 1971,
[b]ut the range of scientific discovery and technological invention is enormous, and as specialistion increases, it becomes more difficult for any man or even committee to know what is afoot everywhere. Even if planning a whole economy were a valid concept (in fact it is a confused one), and even if it were a feasible economic exercise (and this may well be doubted), the planners would still be faced with the paradox that the more successfully science and technology are pursued the more uncontrollable they become and the more social surprises they will give rise to. Scientists and technologists make the central planner's task impossible.
As the knowledge economy grows we each know more about less, knowledge is becoming increasingly specialised and more dispersed and markets are better at dealing with specialised, dispersed knowledge than government experts. As Acton put it as knowledge develops at an ever increasing rate and thus becomes more specialised,
it becomes more difficult for any man or even committee to know what is afoot everywhere.
And thus experts, no matter how expert they are, can not keep up.

This is not to say experts are not useful, they are and we depend on them daily. Every time we use the services of an accountant, an lawyer, a doctor or a dentist, we show faith in their expertise. Kling notes that,
In fact, I would say that our dependence on experts has never been greater. It might seem romantic to live without experts and instead to rely solely on your own instinct and know-how, but such a life would be primitive.
The problem is when we add expertise to power. Kling argues,
First, it creates a problem for democratic governance. The elected officials who are accountable to voters lack the competence to make well-informed decisions. And, the experts to whom legislators cede authority are unelected. The citizens who are affected by the decisions of these experts have no input into their selection, evaluation, or removal.

A second problem with linking expertise to power is that it diminishes the diversity and competitive pressure faced by the experts.

A key difference between experts in the private sector and experts in the government sector is that the latter have monopoly power, ultimately backed by force. The power of government experts is concentrated and unchecked (or at best checked very poorly), whereas the power of experts in the private sector is constrained by competition and checked by choice. Private organizations have to satisfy the needs of their constituents in order to survive. Ultimately, private experts have to respect the dignity of the individual, because the individual has the freedom to ignore the expert.
Kling ends by saying,
To summarize: We live in an increasingly complex world. We depend on experts more than ever. Yet experts are prone to failure, and there are no perfect experts.

Given the complexity of the world, it is tempting to combine expertise with power, by having government delegate power to experts. However, concentration of power makes our society more brittle, because the mistakes made by government experts propagate widely and are difficult to correct.

It is unlikely that we will be able to greatly improve the quality of government experts.

Instead, if we wish to reduce the knowledgepower discrepancy, we need to be willing to allow private-sector experts to grope toward solutions to problems, rather than place unwarranted faith in experts backed by the power of the state.

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