North American publication day is today! Join if you can for a virtual launch party, incredibly kindly organised for me by James Cham at Bloomberg Beta, objectively the best early stage venture capital firm there is. Rather than lukewarm white wine, there will be Henry “Underground Empire” Farrell and Marion “Ordinal Society” Fourcade, who are both Actual Professors rather than wannabes like me, talking about how modern society and politics has to involve at least some engagement with systems as systems rather than just the means by which the agents get things done.
Anyhoo … For some reason I’m reminded of an email sent out to the whole research department by the Head of US Sales at an old fashioned British brokerage I worked for. From memory, it was titled something like “Use of language in US marketing”, and went something like
“I have just spent half an hour on the phone, explaining to clients what [name redacted] meant when he said ‘as sure as eggs is eggs’ in their meetings yesterday. It was only half an hour, but I could have spent that time doing literally anything else, and I really feel like it spoilt six out of six otherwise good client contacts.
“Please give a bit of thought to how you express yourself in meetings over here. In my experience, American clients find cricketing metaphors and the like irritating rather than cute. Sitcom catchphrases can often waste a material proportion of a meeting in awkward explanations. Nobody over here knows what it means for something to do what it says on the tin, and they call them ‘cans’ anyway.
“It doesn’t take much effort to use clear language that everyone understands. You have to do it in Europe anyway so please make the effort in the USA too”
I thought this was great advice, but apparently forgot it, and consequently someone at the Niskanen Center had the job of talking me out of making the “Section 51 Conflict of Interest Policy” a centrepiece of my working paper. It’s a very very UK-specific thing, but in my view might be symptomatic of the big underlying problem that the quest for Abundance needs to solve.
Basically, “Section 51” is the section of the Planning Act 2008 under which you can write to the Planning Inspectorate[1] and ask for advice on a Development Consent Order you’re considering applying for, with respect to an infrastructure project you want to build. The “Section 51 Conflict of Interest” is the policy of the Inspectorate which says that anyone you’ve corresponded with during this process is barred from being appointed to the Examining Authority which makes a recommendation on the consent order.
In other words, anyone who has any prior knowledge of the project and the potential issues it’s raising or the things which came up in the pre-application consultation process is, for that very reason, excluded from any further involvement as soon as the application is filed. You can sort of see why the policy exists, but I think it’s also possible to see that from another perspective, this is crazy.
Of course, it’s crazy if you think that the Planning Inspectorate is meant to be helping to plan things, but eminently sensible if you think it’s a quasi-judicial authority that has to be seen as an independent neutral arbiter. And the UK works very much on the second model. Once the Examining Authority is put together, there is very little scope for communication – the examiners can answer some questions, and they can make their own requests for clarification and information, but they are very reluctant indeed to get into anything which might be, at a later date, made to look like they were pre-judging the issue.
In the interests of brevity, I’m going to hold over a lot of arguments I want to make in future posts, and in the interests of bluntness and controversy, I’m just going to say what I think – people make much too big a deal out of conflicts of interest with respect to the regulatory state. The pendulum has swung too far from some half-remembered era of corruption, and taken us to a place where there is no conflict, but also no interest in getting things done right.
Basically, the regulatory state only works in a high trust environment. And if you have a high trust equilibrium, you shouldn’t need to spend so much time and effort in removing any hint of hypothetical temptation from your public servants. It lacks respect for planning inspectors to set up the system on the basis that they might be swayed against the public interest by the possibility of being rewarded by a contractor. When the shortage of planning labour is as acute as it is, it’s quite ridiculous to think that a “revolving door” might be a risk if people have informal conversations to explain which problems with a project are genuine show-stoppers, which are trivial but worth getting right, and which are bad faith objections lodged for strategic reasons. I think that this communication bottleneck is at the heart of the problem of Unabundance (sorry, spoilers for “The Problem Factory”), so I’m probably going to be posting a lot more about why I think we should be aggressive in mitigating it.
[1] Strictly speaking, the section of the 2008 Planning Act as amended, which is why that link goes to the website of the Infrastructure Planning Commission, a body which doesn’t exist any more. Niskanen had to edit out a lot of this crap, as well as some in retrospect absurd digressions about the subtle but clearly unimportant differences with how things work in the devolved nations. The temptation to think “I had to read this stuff so by god you lot are going to suffer for it” is always there in research jobs.
As an American, please forgive me when I point out that "Section 51" immediately makes us think of "Area 51," here explained by your own BBC:
https://www.bbc.com/news/world-us-canada-49568127
In short, Area 51 is where DJT and Hillary and Musk and Soros and the UFO people meet to plan the demise of human civilization.
Interesting. As recent events have proved, we in the US don't have *enough* conflict-of-interest legislation to guard against corruption. In the words of old-school MTV: "Too much is never enough." Sure as eggs is eggs.
One difference from the UK might be that the relevant US players tend to be an order of magnitude richer, with more to gain, more to offer and, presumably, craftier ways to offer it. But that's speculative on my part.
Until recently, the US had remarkably low overall levels of corruption, with notorious Pareto-style exceptions (Louisiana, Florida agriculture, Illinois...with Chicago a singularity distorting the corruption gravity-field for parsecs around it). These tended to be even rarer at a federal level, and in general the fifty-states model seems to prevent, not encourage, regional blocs of corruption. Mostly.