Why I am not a Centraliser

From an exchange I had with my brother:

Me:

I have been thinking a lot about what you said when you were in London, that it doesn’t matter if knowledge is more and more dispersed while power is more and more centralised, because government can always aggregate the knowledge and act on it if they promote good people. Do you really believe this?

Him:

i certainly agree that you’re right to point out an inherent challenge with modernity and the complexity of governing large groups of people. but it is something we have to live with. perhaps I was just being practical and suggesting the way to cope, rather than saying “it doesn’t matter”. the fact is that however “small” or “large” government is, few would argue with the premiss that it should have a pretty good understanding of what’s going on in the country and that is always going to be hard for one man to get his head around.

three thoughts –
1) hasn’t the act of being a successful leader always been more about choosing and inspiring the right people around you (whether useful for loyalty, strength, knowledge, ruthlessness or whatever) rather than knowing everything?
2) aren’t we stymied in our leader’s ability to process the vast amounts of knowledge we have, in equal proportion to being helped by the fact that he can access a vast amount of recent data if he needs to, rather than waiting 5 days for a guy on horse-back to deliver him a subjective, data-less account of a particular situation?
3) In support of your assertion that leadership in government has changed, Tony Blair says in his book that running a government in the information age is less about policy papers and chatting to the permanent secretaries, and more akin to being the CEO of a private sector company. I think he’s right, and his probably relates to your point.

what are your thoughts?

Me:

I think you misunderstand me. My objection is not that David Cameron doesn’t know much. My objection is that a group of 500 really high-status people doesn’t know much. Who those 500 people are is up to you, depending on who you think runs the country – the House of Commons, or the upper Civil Service. Either way, it’s about the same number of people, from about the same social and educational backgrounds. 200 years ago those 500 people had a chance of running the administration. Now, they have no chance of running the same administration… but instead of making the administration more devolved, we have made it more centralised. More power to people who know less. And the results are predictable. You say Tony Blair compares running a government to being a CEO. Interesting, considering he has never been a CEO. But of course he’s an anomaly – normally you become “CEO” of the country as a result of sterling success as CEO of smaller organisations. You see how I kid? How many of the people running the government have ever been involved in running any enterprise that could make a profit or a loss? Almost all of the 500 MPs are career politicians, and all of the 500 civil servants are career bureaucrats. They know next to nothing about the wider country, and are drawn from an incredibly narrow social/economic/ethnic class. And this is necessarily so, because if you are not a career bureaucrat you couldn’t navigate Whitehall, etc. But hey, if we promote the right people, the knowledge will magically appear, like the Emperor of China’s nose.

And let’s take the CEO analogy further, because a company has market discipline. A CEO is answerable to the board and the shareholders, and there is a clear way for them to judge him – the bottom line. But how do we judge the government? If a CEO claimed that he had trebled spending on the largest division, but had not increased turnover, he would lose his job immediately. Yet Tony Blair treats it as an accomplishment. Clearly something is amiss. Or consider education, seeing as you want to go into it. Who is the education system supposed to serve? Children – but they don’t vote. In theory, their parents are supposed to be some kind of proxy, but realistically this works badly at best, because parents don’t really know (and many don’t care) about the schools. And even for those parents who care, education is only one issue among many, and what they care about is not schools generally, but their local school. But there is a group of people who really know about the education system, and really care about it, and are leveraged into a bloc. And so the education system is run for their benefit.

Teachers and administrators do not work for a living they vote for a living.

Note that this is not the case at a private school. Nor does this have anything to do with the fact that the parents are customers. This wasn’t the case at the free schools that existed prior to the 1944 Education Act. It was because the free schools were local, serving their local communities, and the parents could change them. If changing your local school’s curriculum means getting a different party to win the next General Election, you may as well give up and send your child to a fee-paying school. If changing your local school’s curriculum means voting in a different board of governors… that’s doable.

And this is what I’m talking about. It has nothing to do with “small” or “large” government (although of course I am opposed to large government). The point is that over the past 200 years knowledge has become diversified, yet government power has become concentrated, and the result is that the government doesn’t work. You may say that the government has lots of data, and that’s true, but GIGO. No-one knows what this data means. For example, sticking with education, there has been an explosion in the number of students taking “soft” degrees over the past 20 years, media studies being the classic example. So is this the marketplace in action, or is this students treating university as a consumer good? And how on earth can Whitehall tell the difference?

The solution is – must be – devolving power away from central government and to lower levels. Or rather, de-centralising. 200 years ago the British state was much more localised, and even 100 years ago this remained the case. But one of the disastrous legacies of the Attlee government, which has never been undone, is to aggregate all the power to Whitehall. And this fails because:

1) Local communities have far more knowledge than Whitehall ever can
2) Local communities are far more responsive than Whitehall can ever be
3) Systemic problem of capture
4) People cannot escape

(2) is incredibly important. You have to devolve power, not just administration. Having NHS trusts instead of central administration is meaningless when the trustees are appointed by, and answerable to, Whitehall. That’s just fragmenting the locale of administration, not devolution of power. True devolution of power would have the NHS trust answerable to (say) the local county council.

And (4) might be the most important. The point is that if West Sussex runs crappy schools, then people will leave and go live in East Sussex. This is really good on two levels. Firstly, it means that if administrators screw up, it doesn’t matter too much, because people can still get good services from some other administrators. But secondly, it means there will be competition between the administrators, and best practice for them to follow, and so on. And so there is a race to the top, instead of mediocrity.

Look at the USA, which is basically the most successful country in the world since it was founded. Why? Some people say because of the independent culture… but why is the USA’s culture like that? Culture is not independent of institutions. And the truth is that the USA’s federal institutions are a complete joke. But that doesn’t matter, because the USA has (or had until recently) a truly devolved system of power. So when the Rustbelt states legislated themselves into irrelevance with pro-union laws, that didn’t slow America down too much, because people simply moved south and west to more free-market states. And some American states are poor and poorly run (Mississippi, say) but that doesn’t slow America down too much because Mississippians can go get jobs in nearby Texas.

So, I fundamentally disagree that this centralisation is something we have to live with. In fact, I think it is something we cannot live with. I do not think any country can long be governed in the fashion that we are. My view is that the growth of government bureaucracy is strangling the country, and that unless things change dramatically we are going to come to a sharp reckoning. Now, this does not mean that I am predicting that we will have chaos on the streets and Duncan’s horses eating each other. Probably we will be wise enough to avoid sharp reckonings, and our current government is certainly working on the problem. But the warning is there. Rome had approximately 300 bureaucrats in the time of Augustus. The Western Roman Empire alone had more than 200,000 by the 4th century AD. I leave it to you to decide when Rome was better governed.

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