A critical rationalist approach to policy creation

The starting point for this piece is "What use is Popper to a politician?" by Bryan Magee. Magee is a long standing advocate for Popper and therefore the philosophical position known as Critical Rationalism (CR). Without wishing to take away from Poppers contribution, I prefer to use CR and make clear that this is not advocating the opinions of a person but to argue for a constructive philosophical approach to policy formulation. 

Magee is that rare thing in the UK a public intellectual who was an elected politician. First as a Labour MP then for the newly formed SDP. The article referred to above was written some 10 years following his career as an MP but is strongly coloured by his social democratic position. He seems blind to the non-social democratic liberal position which is mine. However this is not too grave as the philosophical stance being advocated is available to anyone who is open to rational argument and evidence.  Magee himself mentions Margaret Thatcher as the sort of radical conservative who could open to this approach.

In much of what follows I will follow Magee quite closely but my formulation is adapted to the creation policy proposals and amendments. The sort of work that takes place prior to a party conference. One of my motivations for this piece is dissatisfaction with both the process and with much of the output from this process.

CR itself is a subject with its own extensive literature, but you should be able to pick up the essential points relevant to policy formulation in what follows. CR was developed via a critique of positivism and induction in the natural sciences. It presents the scientific enterprise as an exercise in problem identification and resolution with the important caveat that the solutions are provisional and need to be subjected to continuing critical review. Policy formulation is not a natural science but the recognition of the fallibility of proposed policy proposals should be evident.  

So, in policy too, first identify and formulate the problem with care. This means not jumping to solutions or using the issue to display indignation or personal virtue. The articulation should be as clear and jargon free as possible. For example, in the case of health consequence of diet, it is necessary to formulate the problem, if there is one, as objectively as possible. If people are eating too much; that is their concern. If the are eating too much and damaging their health; that too is their concern. If over eating is leading to strains on the health service, leading to higher taxation, then that is potentially a real policy problem and it is possible to start to address it. But even here we do not stop. Having formulated the problem better we can now quantify it. This is not just looking at the evidence but looking at the quality of prognostics and the assumptions made. There are always assumptions.

The next step is to formulate policy proposals. It is the creative step, but based on best available knowledge. This is not just data but economic theory, philosophy, science and knowledge of how government works, and whatever else can be brought to the task. Other softer and more value oriented considerations should not be neglected. For example, ask whether it would be legitimate for free individuals to be constrained through a proposal that addresses a problem by managing a statistical distribution across the whole population. It is not possible to derive a solution for the body of knowledge, hence the creative element. In getting proposals formulated anything goes: debate with yourself, with others, writing Op-Eds and getting feedback, etc. The outcome should be a proposal or set of proposals that is clearly articulated, defendable and actionable. By actionable is meant that a policy is a solution to a problem and therefore if acted upon will, or at least intends, to solve that problem.

Done? No. The proposal needs to be subjected to a further critical analysis. An important mechanism is to try out the proposals against implementation scenarios. This is motivated by the recognition of unintended consequences of a policy. That is, the solution may not be robust to  small changes in the implementation scenario or it may have negative impact if implemented in a certain way. The outcome should be a ranked set of actionable policy proposals with supporting explanations and evidence. But not always.

It is quite possible that after much hard work and critical analysis no actionable policy proposal emerges. So, have we been too critical. Very unlikely. Remember that fallibility at each step is never eliminated.The problem as formulated may not have an actionable solution or the actual problem has not been identified after all. To return to the impact of diet on the health service;  is the problem perhaps with how the health service is structured. For example the health service has no, or weak, personal responsibility mechanisms. The other realisation is that in the end it may be better to do nothing. The process will not have been a waste because you will know why you are proposing no action. However in many and I would anticipate the majority of cases the approach outline here will indeed help in identifying strong and defendable policy proposals.

My main motivation for writing this is the often dismal to poor quality of policy proposal writing.  If in turn you are critical of the CR approach or my formulation of it then you too are participating.  Thank you.

Sustainable Energy - without the hot air: 10 years on

The free to download ebook version of Sustainable Energy — without the hot air was last issued on the 3rd of November 2008. Ten years have passed since this important and influential science based look at sustainable energy was updated. I am sure that if it was not for the early death of David MacKay, he would have built upon this achievement and updated and evolved his position. There have been calls for a collective effort to keep this book up to date, notably from Chris Goodall. This has not gained very much traction but books do tend to need a high level of personal ownership to advance.

Let's look at the approach MacKay took as it has been particularly robust to intervening events. Rather than focus on what 2008 technology could do he used physics to bound what is in principle achievable. He attempted to answer the following question as honestly as possible: how much energy is there to be harvested practically and in a sustainable form? Questions of social, economic and wider environmental impacts were not ignored. These factors lead to MacKay to propose a number of plans, of which the feasibility and affordability will depend on technical and behavioural developments. They each add up to 70 kWh per person per day (estimated consumption in 2008 was 125 kWh per person per day) and are shown below.

David MacKay provided a ten page summary and the details of the figure above are explained there. The presence of Nuclear and "Clean Coal" will not please environmental purists but MacKay's approach is pragmatic and clear that dealing with climate change will require major sacrifices, of which green sensitivities are not the most onerous. For any of these plans to be feasible MacKay's analysis points to a 25% improvement in heating efficiency and a 50% improvement for transport and other efficiency savings that must reduce overall energy consumption to about 60% of 2008 levels.. His analysis does not show that it will be easy to achieve this nor that it is achievable then or now through established technology.  He does argue persuasively that there no barriers in physics. This analysis lays bare, although largely implicit in the book, the need for political leadership and imagination that will galvanise humanity to meet the challenge.

Let's pause to reflect what an achievement the book was, how well it stands up against developments and what a loss David MacKay's early death was. Since 2008 the acceptance of the evidence for climate change and its human generated causes has gained much wider informed acceptance. The case for a technically grounded response to the challenge has never been stronger and MacKays example needs to be followed and acted upon. Science does not only provide the analysis but also the foundation for the technology that the solution to the climate change challenge will require.

Reclaiming and renewing liberalism: Free Trade

Free Trade as manifested in the repeal of the Corn Laws was a founding event for the Liberal Party. There are signs however that liberals are becoming wary of the phrase. This a clear symptom of the malady that the The Orange Book was seeking to address fourteen years ago. The ailment is that key liberal ideas have been appropriated and distorted by the Conservative Party and in the case of the phrase "Free Trade" by the right wing of that party. So, by association in the minds of many with a weak grasp of history the phrase has become in the UK a right wing Conservative slogan and tainted for that reason.

The phrase "Free Trade" on its own is open to a number of interpretations and requires context to clarify which interpretation is meant. On the Conservative right the freedom being emphasised is freedom from regulation. Liberals have long since moved on from a 19th century laissez-faire philosophy. Freedom should be understood as the liberty of all parties to enter into an exchange or not. This means commerce and trade is in harmony with the core liberal value of individual liberty. Domestically, it has long been recognised that the rule of law is required for competitive markets to flourish. Internationally a system of rules is required to allow trade between and across nations to be effective. Agreements that include harmonisation of regulations are necessary but we should be limiting them where possible to concerns like safety in the food chain or of electrical products, for example. Regulations should not be used to skew advantage to one party or a particular group.

Liberalism is a dynamic and adaptable philosophy. Today's goods and services are of a complexity that makes a laissez-faire approach, suitable for corn, unfit for the exchange of contemporary goods and services.  It is this dynamic and forward looking liberalism that is presented in A manifesto for renewing liberalism. But here too there a sign that the phrase "Free Trade" is not to be used and "Open Markets" used as a replacement. Are we to give in to the loud and strident Conservative right and cease talking directly about Free Trade and its benefits?

No, while looking forward, it is important to mark and take pride in key historical achievements. To the fore among these is the establishment of Free Trade as the engine of growth in the 19th century and then its resurgence after the 2nd World War based on a system of agreements and rules that recognise and protect human freedoms and rights.  So let us not be bullied out of using the phrase and support Free Trade as the strongest economic mechanism yet discovered for fostering growth and relieving poverty.

Values: liberty and its supporting mechanisms

Liberalism is often characterised as a compromise philosophy, with individual freedom being in essential conflict with egalitarian views on justice. The values that are thought of as liberal are often represented as forming some watered down consensus where everything is a compromise for a comfortable life. These values are gathered into lists such as that provided for school projects on "British Values".  According to Ofsted, British Values are:

• Democracy
• The rule of law
• Individual liberty
• Mutual respect for and tolerance of those with different faiths and beliefs and for those without faith.

This list seems fine on first reading and serves well as a starting point. Here, I will use it as such. 

Here I will defend the view that liberalism can form a coherent philosophy with a system values distinct from socialism (democratic or not) and conservatism.

Personal liberty, a fundamental liberal value and effectively tautologous and so does not need an argument to be included.  It is on the Ofsted list as equivalent to their third bullet, but what is the status of the others on the list. I acknowledge that all are important, with a reservation on the fourth,  and mostly to be cherished but are they equally fundamental or even values? Of the possible meanings of "values" consider (Oxford):

1. One's judgement of what is important in life; 
2. Principles or standards of behaviour.

Each item on the Ofsted list can be interpreted consistently with the first meaning. Only the fourth on the list is clearly consistent with the second meaning but the others could be coaxed into an acceptable format. Equality is omitted from the Ofsted list as is freedom from violence.

Is it possible to do better with our values than provide a bland list? Can some structure be provided or a theory that explains away the perceived conflicts to provide an coherent mesh of values?

Here the value adopted to start the critical discussion is personal liberty for all where each individual is limited only to do no harm to others. By personal liberty I mean (provisionally) freedom of choice and action. All, so far, quite uncontroversial and consistent with Mill's position in the classic On Liberty. The question to be addressed here is: what are the other candidates for liberal values and whether any are as fundamental to liberalism as personal freedom? The obvious ones that spring to mind are democracy, equality, freedom from violence, rule of law and economic freedom. Economic freedom is included because some claim it as a fundamental freedom. In addition, under the name Capitalism, economic liberalism is often described as an ideology by its opponents, often communists but significantly milder socialists and radicals too.

Of the three additional candidates outlined above the one that I think would get the most support, as a value, is democracy. Indeed there are democrats on the extremes (but not always too extreme) of the political left and right who may even value democracy over personal liberty. So is democracy a candidate liberal value or is it something else such as a supporting concept or an enabling mechanism?

It is a tenet of classical liberalism that democracy, just as any form of government, must be held in check by constitutional measures to avoid effects such as the tyranny of the majority. This in itself is not too different from the constraints on personal liberty but here the reason to constrain democracy is to protect personal liberty. Therefore making liberty prior or a more fundamental value. So, why democracy? The strongest reason for a democratic political constitution is to enable the non-violent removal of bad governments (as argued convincingly by Karl Popper). It is desirable for democratic governments to make good positive decisions but scepticism about there capacity to deliver effectively a wide range of services as opposed to laws and regulations is justified by much evidence. Not adopting democracy as a fundamental value is not to de- or under- value it. Supporting mechanisms are essential for values to make  their effect.

This means that freedom from violence is also more fundamental than democracy. A constitutional democracy must have mechanisms to return at regular intervals to the opportunity to change government. On democracy as a decision making mechanism there is sufficient analysis on voting systems to show that there is no generally applicable voting rule to obtain optimal decisions. Therefore democracy cannot be defended a generally effective decision making mechanism. So what  the people vote for needs to be constrained based on the more fundamental freedoms of personal liberty and freedom from violence. Although not optimal, voting does provide a way to arrive at pragmatic acceptable outcomes in many cases. This pragmatism justification means there are a number of candidate constitutional arrangement that have evolved or been chosen to implement a democratic order. 

All this makes democracy an essential enabling mechanism to ensure a satisficing degree of personal liberty and a considerable measure of security from violent acts. It could be argued that freedom from violence is part of personal liberty but they are to considerable extent independent. In a social situation less enlightened than the one we enjoy in western Europe, and some places elsewhere, we can well imagine a preference for freedom from violence over personal freedom and even sacrificing freedom to gain security. Democracy, correctly implemented, provides some guarantees against violence by government against its own population but for more general protection we need to look to the Rule of Law. The Rule of Law is, like democracy, not a liberal value in itself but a mechanism that constrains the freedom of persons or groups but leaves a valued measure of personal liberty to be enjoyed in safety and security.

Economic freedom is often taken a tradition liberal value.  There is ample historical evidence that, given the opportunity, reasonably free persons will organise spontaneously into cooperative groups that eventually give rise to market structures at their local level. In time groups will interact to produce a wider market order.  Analysis of market mechanisms show that they enable cooperation and creation of wealth without coercion. The wealth creation of the market provides the resources to make practicable the desires and actions of free persons. Thus economic freedom is an enabler or mechanism and that is also the case if emerging economic order is labelled Capitalism. It is an enabling mechanism, not a value let alone an ideology, and as such required regulation and a legal framework. Within this  context of values and mechanisms, individual freedom transform in a concept of individual liberty that is enhanced through equality of opportunity, rule of law and open markets.

So, to summarise personal liberty along with freedom from violence are distinct if still mutually influencing values. Democracy, Economic Freedom and the Role of Law are enabling mechanisms. So one fundamental value has been added that is not on Ofsted's list. Democracy and the Rule of Law become essential enabling mechanism along this economic freedom as instantiated in the competitive market order. That leaves the last Ofsted value. It looks like an awkward add on and I would argue that it essentially a polite statement of a desirable attitude that is fundamentally derived from the moral equality of individuals. However one aspect of it is fundamental and that is tolerance. Tolerance is what enables the other aspects of liberalism to work together as a system.

I end by proposing an alternative ranked set of fundamental values to be guaranteed by a constitutional liberal democratic order:

1. Freedom from violence
2. Personal Liberty
3. Equality of opportunity.
4. Tolerance of other individuals or groups that are not causing harm

These being supported by the mechanisms of democracy, rule of law and markets.

Liberal leadership in ideas: the welfare state

I have never liked the term "welfare state" with is paternalist tone, preferring "social state" derived from the German Sozialstaat  and fitting with the concept of the social market as a regulated, fair and free economy. It was interesting to read today in The Economist (Repairing the safety net - The welfare state needs updating) that the founding spirit of the UK welfare state, the Liberal William Beveridge, didn't like the term either. However, and more importantly, in that article  and the introductory leader -  Reforming the welfare state: Back to basic liberalism - the point is made that it was the liberal philosophy of Beveridge that informed the identification of the need, scope and form of the UK welfare reforms of the  late 1940's. The main thrust of these articles in The Economist is that we must return to liberal values and creative thought on the mutually supporting nature of effective welfare with effective wealth creation to redesign the welfare state.

As chance would have it, this is a topic I addressed in a recent post, Hayek and the welfare state, in which the argument was made that a principled and human approach to welfare was not only compatible with but should be an essential complement to the market economy. This is  very much the tone of the pieces in The Economist too.

Years of tinkering and short term politically motivated meddling from left and right have led to the UK social protections becoming a bureaucratic entanglement that is costly and provide at best a second rate service. In addition the weakening of the liberal tradition, Liberal Party and the consequent decrease in influence have contributed to this state of affairs.This is not the time to roll back to 1945 in terms of detail and implementation but just as the market has evolved to become more diverse and international, social protection must also be thought through again. Neither is it a mere matter of picking up The Orange Book, but it does provide a valuable starting point. What should be returned to is the core liberal philosophy with its humane side personified by Beveridge dealing with the “Five Giants”: disease, idleness, ignorance, squalor and want, and it competitive market foundation for the creation of wealth. We can look to the rounded enlightened figures such as Adam Smith and John Stuart Mill as well as the more austere Friedrich Hayek. Nor should the still very pertinent thinking of the German social market economists such as Walter Eucken be neglected, as well as others across the world. One of most recent champions of liberal enlightenment values, Steven Pinker in Enlightenment  Now, was a pains to stress that it is the combination of social care and wealth creation that has given us the progress in global well-being that he documents in such detail.

Reform is needed to deal with affordability and fairness of a social provision system that is designed to provide the safeguards that foster wealth creation rather than undermine it. The social safety measures must provide quality services that people are proud to use and are proud of the society that provides them. Services such as the NHS do not provide this quality and are currently condemned not to be  capable of delivering it, as outlined in a recent opinion piece by Matthew Parris.

To repeat the essential points from my earlier post; four principles can be proposed to help design social insurance that can enhance market dynamism and economic freedom in a Free-Market Welfare State:

• Risk and Entrepreneurship.  As the term “safety net” suggests, social insurance can enhance risk-taking and entrepreneurship by ensuring failure is not catastrophic.
• Search and Adjustment Costs. Workers who are laid off in periods of market restructuring should be ensured a smooth transition through appropriate wage replacements and active labour-market policies. While your job may not be secure, your employment is. 
• Benefit Portability. Markets work best when social benefits follow the individual and are detached from any particular firm or market structure. (In the UK many people are often trapped in a firm due to penalties imposed to their pension entitlement. In contrast the German system decouples this, as recommended.)
• Migration Robustness. Welfare benefits should be payments or services resulting from insurance funds to which people have contributed while working in the host country, migrants who claim such benefits should not therefore be perceived to be a great problem. There needs to be further humanitarian safeguards for refugees and others in dire need; as opposed to economic migrants.