Are we too relaxed about those who promote policy failure?
Some years ago, when universities were still relaxed places committed to teaching, a colleague of mine read a news item to his monetary economics class. It said that the eminent monetarist economist Milton Friedman now recognised his advice to the Chilean Government was quite wrong and he had returned all his consultancy fees. The students were astounded, until it dawned on them it was April the first.
A hoax it may have been, but it does raise the question of when consultants should admit they were wrong and what they and we should do about it. Many consultants will tell you they never make mistakes (even when it is not April Fools’ Day) – and then tell you the dreadful mistakes made by their competitors (with the implicit plea of ‘hire me’). Instead they prefer to forget their past mistakes and move onto the next ones. In contrast to the theory that consultants who fail should not be hired again, too often they are.
I was reflecting on this when thinking about a huge policy cockup which, literally, caused unnecessary deaths. The consultancy fees for the health redisorganisation of the early 1990s were in the order of hundreds of millions of dollars; the consequence of the advice was that there was a deterioration of the services health professionals delivered and higher mortality. Yet nobody took responsibility for the failures.
Admittedly the Minister of Health in charge was sacked, but he continued a successful political career in policy areas where he seemed to have more competence. The Prime Minister blamed his National Party’s massive fall in voter support between 1990 and 1993 on the failure of the health redisorganisation. So there was a kind of political accountability, although given the number of policy cockups it is hard for an electorate to discriminate among them. (National only squeaked back into power in 1993 because Labour, still being punished for their Rogernomic policies, lost votes too.)
But what about those ‘independent’ consultants who supported National’s health redisorganisation policies? The defence that ‘we were only doing what we were paid for’ does not work; never has for my generation since Adolf Eichmann, one of the major organisers of the extermination camps in Nazi-occupied Eastern Europe, was in 1962 found guilty of war crimes despite his plea that he was only following orders.
Instructively, as far as I know those who personally opposed the health redisorganisation, often at great personal cost, never got any public recognition. (Though some are so modest they may have turned honours down.) Why do not we make more use of the critics of failed policy? Does getting it right put you outside acceptable circles?
Of course, many of today’s generation will mention in their memoirs a positive contribution but it was not noticed at the time. I was vastly amused by politicians’ memoirs of earlier times which mention their opposition to the Vietnam War which, if you read carefully, began when it became a popular movement rather than earlier when an unpopular movement was laying the groundwork for the mass opposition. A lot of leadership in New Zealand politics is from the middle of the bunch.
There is a similar problem with the economic changes we call Rogernomics although the dealing with the failure is slightly different. Defenders talk of the success of implementing their policies without mentioning the poor economic outcomes; sometimes they make vague claims of better economic performance, unsubstantiated by any evidence (and which generally contradicts them).
My concern comes from my methodological training. Karl Popper says that when you want to criticise an argument, put it into its strongest form. (What a contrast with much of our public criticism, such as it is, which deals with the opposition by setting them up with the weakest arguments available, if necessary misrepresenting them.) I have tried to put up a strong argument for Rogernomics, but it is far from compelling. What I should like is someone sympathetic to what happened to defend it (other than by the weak argument that they were the right policies even if they did not improve economic performance).
The closest that I know of someone trying to do this is Don Brash in his 2014 memoir Incredible Luck. It refers to a 1990 report which only promised there would be major gains from the Rogernomic policies. In fact there were a further three-plus years of economic stagnation or worse. Is that the best he can do? See what I mean about avoiding the hard thinking?
There are numerous other examples of policy failures where I cannot find anyone who today will defend them. I have deliberately steered clear of current examples, not just because there is a possibility they might come right in the future, but this column would not want to commit the irony of preventing some from getting an honour from the Queen or contract work from the government.
I notice this government appears to be using some of those who failed in the previous policy round. (It is complicated by the fact that some policy failures, such as the Performance Based Research Fund and Working For Families, were initiated by the previous Labour Government; the intervening National Government did little to address them.) One fears that such advisers will see the problem as modest fine tuning rather than going back to basics and so the fundamental failures will truck on.
I am reminded of the story of the tenor making his first appearance before a La Scala audience, famous for its discernment. There were loud demands for an encore after he sang his aria; he repeated the aria and another encore was called for. Exhausted he asked how many times he had to sing it. From the back came ‘until you bloody well get it right’.