Social Science and Public Policy
How do economists and other social scientists influence public policy?
Yesterday, I recommended Jeffrey Friedman’s article on the financial crisis. Its theme is regulatory hubris, and Friedman disparages “economism,” which might be described as a belief that wise economists can guide government policies to correct market failures. Note the echo of Hayek’s disparagement of scientism.
Also yesterday, Mencius Moldbug wrote,
By far the most significant source of decisions in the modern American system of government is something called public policy. In the 20th century, it was discovered that the task of governing, thought in all previous centuries to be an art requiring wisdom, talent and experience, is in fact a science, like chemistry or card-counting. This set of sciences is often described as the social sciences, a slippery name if I ever heard one.
However, in a review of a book by John H. Wood on the history of macroeconomic policy, David C. Wheelock writes,
Economists have rationalized more than influenced policy, Wood contends, and the direction of influence between economic theory and practice is primarily from the latter to the former.
The main science of political economy is the science of obtaining and retaining power. As far as expertise goes, the pollster, the fundraiser, and the media expert are all fundamental to the operation. The public policy expert is for decoration. If you want to be an economic policy adviser when you grow up, then my advice is to learn to rationalize the methods used by leading politicians to obtain power.
Is health care reform about health care? No, it is about seizing and retaining power. Was the stimulus about stimulus? No, was about seizing and retaining power. Is cap and trade about global warming? No, it is about seizing and retaining power. Was TARP about saving the financial system? No, it was about seizing and retaining power.
The social scientist’s role in the political process is to say, “X is a problem. Government must solve X. Here are some solutions.” The solutions that rationalize seizing and retaining power will bubble to the top.
Suppose you believe that regulators cannot possibly have the wisdom to direct human activity. Suppose you believe that politicians spending other people’s money tend to choose less wisely than people spending their own money. If you want to get anywhere as a public policy adviser, keep those beliefs to yourself.