An Economic Issue

In a fascinating London Review of Books essay earlier this Spring, the distinguished historian Peter Clarke engages in a singular attempt to resuscitate the reputation of Enoch Powell, the late British parliamentarian and classicist who became infamous for a xenophobic address in Parliament in 1968 that was later dubbed the “Rivers of Blood” speech.

Acts of political rehabilitation are to me suspect, particularly in the case of a man whose legacy has been hijacked by the lunatic fringe. This one is difficult to dismiss out of hand because it is taken from the perspective of history. Clarke does not attempt to justify or defend Powell’s most odious ideas: if Clarke is an apologist for Powell, he appears motivated not by ideology or ulterior drives, but by a sense that history is ill-served in settling for a one-dimensional caricature of an influential figure.

Let us be clear: Enoch Powell rode into the scrap heap of history at full gallop and of his own free will. But a cursory review of his life reveals at least  two salient truths: first, that artful couching, superb logic, and fine language do not improve a repugnant idea; and second, that the espousal by an individual of one or more bad ideas does not prima facie brand all of the other ideas espoused by that individual as bad.

I will return to that second theme in another post.

One idea that is worth consideration is one that drove Powell through most of his political career: that some government programs, policies, and actions have value that cannot be measured by economic or purely utilitarian means, and indeed that some policies and actions that may appear economically foolhardy are nonetheless good ideas. As Clarke notes:

It wasn’t part of [Powell’s] doctrine to scrimp on the legitimate functions of the state as he saw them; and if a function were deemed legitimate, he made very high claims indeed. Intuition rather than economic logic guided him. For example, he began a speech in 1981 – in favour of public subsidy of the ferry service to Northern Ireland – by stating his premise as the sort of mere common sense everyone would accept: ‘Communication is the essence of all government: it is not for nothing that the mail is the Royal Mail.’ The idea that such conclusions can be reached by treating the royal status of the mail as axiomatic would surprise many latter-day Thatcherites, who argue that the market could sort this problem out more efficiently.

This was a tough one for me to get down initially: it flies in the face of good business sense and an approach to policy-making that has been ascendant for at least 160 years. It implies that the Congressional Budget Office brand of economics-based cost-benefits analysis does not always produce the best policy.

My instinct is to argue the opposite: I do not think we give enough consideration to non-partisan cost-benefits analysis when making policy decisions; that programs are born and outlive their usefulness because of ideology, pork-barrel politics, or bureaucratic self-interest.

But Clarke’s article on Powell compels me to rethink my orthodox adherence to that principle.

Here are the questions I am pondering:

  1. If we cannot measure the return-on-investment of a policy, is it worthwhile?
  2. What makes that policy more or less worthy than a policy whose impact can be measured in a material form?
  3. Have we placed too much reliance on economics as a measure? Or do we place insufficient reliance on economics and cost-benefits analysis?
  4. Is it time we recognize that decisions taken by non-commercial actors (individuals, organizations, governments) may and sometimes should be made for reasons that defy economic logic or even pure utility?
  5. Should we identify and recognize other determinants of policy quality?
  6. On what basis do we decide which means of analysis is best for a given policy?

I have been long away from the study of these matters, so I recognize I may have meandered onto well-trod ground. If so, please tell me.

A government run by roving bands of ideologues, self-interested legislators, and nest-feathering bureaucrats is a recipe for revolution.  At the same time, government by abacus taken to its logical end is a tyranny. On a river of hard questions we must navigate our way back to a passage between those two extremes. The alternative is The End of America As We Know It (TEOAAWKI).

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Author: David Wolf

An adviser to corporations and organizations on strategy, communications, and public affairs, David Wolf has been working and living in Beijing since 1995, and now divides his time between China and California. He also serves as a policy and industry analyst focused on innovative and creative industries, a futurist, and an amateur historian.

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