Wishful thinking in policy debates

Four years after the global economic system almost crashed in on top of itself we're still searching for ways to build sustainable economies. These discussions and debates are important and complex, but they appear to be suffering from a set of ideals that we just cannot seem to shake off - the silver bullet, the binary choice, and the permanent fix. Maybe this is a result of our 24 hour news culture and the need just to fill airtime, but it feels like we're on a repeat loop of lazy thinking and that's stopping us from making serious progress on restarting the global economy.


Let's take each of these in turn. First is silver bullet, the desire to have a policy solution that at a stroke solves all of the problems that face us. Hopefully it will be cheap, easy to implement and obvious enough to garner public support. An example of this is the much repeated mantra of deregulating the market, specifically in the UK reducing the 'burden' of red tape on small and medium size businesses. While there are doubtless some examples where regulation could be eased, listening to some political speeches and lobby groups you could be forgiven for thinking that if this could be achieved all would be well in the world. We know this is not the case, but still the issue comes back time and again as a silver bullet that could save the economy. And so it is in many other areas of policy, the desire to have a complete fix even though we know that silver bullets are just bullets. 


The binary choice is even more pervasive and it is a core element of the narrative on the economy. Prior to the credit crisis reporting on the economy tended to go something like this - services great, manufacturing bad. All of the choices on the economy were reduced to this binary set, either you were a service company or a manufacturing company, either you were part of the new and wonderful knowledge economy, or you were trapped in the depths of time in some dark mill that dared to produced things. It is incredible to see, but this binary thinking and discussion continues even now, as this article on manufacturing versus services shows (and is the one that prompted me to talk about how we have policy debates). Our choices are rarely if ever a simple choice between yes and no, forward or backwards. Reducing the world to ones and zeros doesn't work at the level of economic policy, or most other policies for that matter. 


Last and by no means least we have the hope of permanent solutions. If we could just reduce the tax rate for the top earners we'd have a virtuous cycle of earning and investment and all would be well into the future for the economy, or so the story goes. It reminds me of the start of the Incredibles when Mr Incredible is being interviewed about being a superhero. "No matter how many times you save the world, it always manages to get back in jeopardy again. Sometimes I just want it to stay saved! You know, for a little bit?" Unfortunately the world keeps on turning and governments along with everyone else needs to keep on adapting. 


Our economy faces very difficult challenges. Allowing debates on policy which will have major impacts on individuals, families and companies to use these misleading ideas is not only incoherent it is wrong. Policy makers of all political stripes, commentators and we the public have to allow complexity back into our discussions, otherwise we'll just keep on looking for solutions that don't exist. 


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