I read lots over the holidays, not all of it relevant to this blog. But here are some thoughts on two pieces that I think readers may find interesting.

The first one I confess was drawn to my attention before Christmas, but I only got to a thorough read just before the big day and then didn’t have time/motivation to write about it. The second one was drawn to my attention probably a year ago, but I am a lazy reader sometimes and it languished in my reading pile for far too long.

Thanks to Mary Clarke for the heads up on the Banks article in The Mandarin, and Ben Furmage, my sincere apologies for taking to so long to be able to have the light bulb discussion.

Banks 2018

In the Mandarin article, Gary Banks makes many clearly useful observations; surely he’s borrowed my songbook. I am in strong agreement with his central thesis, that while evidence – of many sorts and varying reliability – is important, it is not the only consideration. His is a truly practical approach acknowledging that the art of policy making is not a science or simply a process, but a complicated activity that takes into account much more than the evidence, but it should not be a fact or analysis free zone either.

But I was disappointed, but not surprised, by his luke warm treatment of the role of the public sector. I’d like to see a lot more from these folks to address and talk about this issue. My experience suggests that a) many public servants do not understand their responsibilities and b) they weren’t necessarily made aware of them either. As I have noted before, I was regularly told that a brief or policy proposal was being prepared with scant detail on options – sometimes even objectives – because ‘that’s what the Minister wants’. This was a result of a leadership which failed to educate new recruits – and remind longstanding officers – that their roles were considerably broader than reacting to the Minister’s decrees and that they were the keepers of the institutions.

Banks makes this point well.

Among the most important of these are stewardship over institutional and procedural features that transcend the existence and policy orientation of any particular government.(Banks 2018)

Banks notes that three factors are leading to this unhappy state of affairs,

• less secure, more ‘political’ senior appointments,
• a dominant ‘office’ with more political than policy expertise,
• decision-making in a hurry that draws on whatever advice is at hand. (Banks 2018)

Moving away from this situation will not be easy and it is in large part a matter of the lack of awareness – by some in the political class and elsewhere – of what the slow but thorough bureaucracy can offer by way of formulating good, successful policy. The economist in me wants to add that the bureaucratic leaders also need incentives to get them to once again encourage the pursuit of thoughtful, researched, and understood policy – as opposed to the reactive knee jerk policies we are mostly suffering under.

A start would be for some more debate and open dealings from all sides. I can vividly remember being cajoled and pressured, because I was writing about productivity improvements and being told by other, more senior, bureaucrats (in another department) that that word was poison and it was pointless to put it in briefs etc. Try writing about productivity without using the word and you’ll see how naff that idea was. But you know what? Word got out that some mad femme in Treasury was writing about productivity and advisors started calling, wanting to know more. So second guessing and being risk averse is a blueprint for failing to even acknowledge, let alone reach, potential.

The Last Days of Night

This is a truly engaging book on many levels. Firstly it is just a ripping good story well told. It is based on fact, but it has been written with a bit of licence to make the story more compelling and fast paced, but the main facts and events are true. For an economist it holds many treats.

This is the story of how electricity came to the USA. It is essentially the tale of George Westinghouse, Thomas Edison, Nikolai Tesla and a brash young lawyer, Paul Cravath.

Much of the plot line centres around the patent for the light globe, which was dependent on how electricity was delivered – AC or DC. This is a very interesting story, but my particular delights with this book came from other aspects.

Firstly, there were the three very different approaches to ‘invention’ the protagonists took. Westinghouse wanted the best product to be brought to market. Accordingly, he was interested in commercialisation. Edison wanted to test every possible combination of factors to ‘invent’ new or improved products. Tesla just had exceptional ideas and wanted to show they were possible, once that was achieved he lost interest. Three driven men had three very different approaches and motivations.

One of the best economic stories though is how the two businessmen, with just a little help from a lawyer, managed to merge into one large monopoly – this was of course before laws regulating such matters. But is well worth the read for this alone. Perhaps it’s also worth thinking about how one of these men (Thomas Edison) got sidelined and even had his name removed form the company he founded and lead for many years.

Even more obscure, were the innovative actions of the young lawyer. He looked at the way Edison organised his business and how he had a process for delegating the mundane, dare I say, tedious, tasks to his teams of engineers, but was able to direct and control what was being done. In doing so he ploughed through a mountain of options and found many ‘new’ ideas along the way. Cravath wondered why this could not be replicated in the law? At that time, lawyers did all their own work and operated as a series of individuals in a firm. Cravath, without the knowledge or agreement of his partners, recruited a handful of final year law students as associates to do his legal legwork – digging up files, case and precedents. Sound familiar? That’s how all law firms I know operate now. Partners direct and lead but certainly don’t do their own legwork – that’s what junior staff do! Well done him for adapting a process to improve his own business – and in the end having it adopted by the whole industry. How those in the more junior ranks of the profession see this is another matter[1].

And yes, as that last point illustrates, the characters in the book do not always come out looking good – all of them engage in behaviours which, if not actually illegal, are pretty unethical at times. But this too offers up insights into what motivates people and also how much regulation etc since the 1880s has changed – or attempted to change – behaviours.

 

 

 

 

 

Banks, Gary, 2018, Whatever happened to evidence-based policy making, The Mandarin 30 November 2018.

My apologies but I could not get the hyperlink to work.

Moore, Graham, The last days of night, Random House 2017

[1]See for example, https://www.lawyersweekly.com.au/biglaw/24241-worksafe-making-enquiries-into-kwm-regarding-employee-fatigue