the sydney opera house exam question

extracts from a forthcoming

I am on deadline at the moment, so although I promised to come up with a joke, I am afraid that the joke in question is over budget and behind schedule. Instead (thanks to Trevor for suggesting something similar with respect to the Millennium Dome), I’m going to pose an exam question, in the form of an extract from my current manuscript of the book version of The Problem Factory.

The question is: “Would you have built the Sydney Opera House? Show your working”.

As well as the questions I discuss below, I think this is a very interesting on in the field of aesthetics and even moral philosophy. The Opera House was funded by a lottery, and most of the people who bought tickets don’t go to the opera. It’s an absolute paradigm case of highbrow culture funded by taxes on the working class. But it’s very popular! The question here suggests that doing something which is basically unfair can, in principle, be justified retrospectively by artistic merit. Or does it? You tell me.

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We are heading into the closing chapters of the book now, where I start talking about solutions and ways to tame the problem factory. There is a lot that can be done, I think, although first I need to talk about some ideas that won’t work or might be counterproductive. We’ve demonstrated our respect for the problem, at length, and we can now stop touching gloves with our adversary and start repeatedly punching it. But before we go into this, I need you to do a bit of a gut check.

In your heart of hearts, deep down, do you think it was a good idea to build the Sydney Opera House?

Looking through old textbooks on planning problems, the Opera House often shows up as an example of a “Great Planning Disaster”. In the book of that name, the theorist Peter Hall devotes a chapter to it, detailing how its costs ended up overrunning by more than ten times. The architect, Jørn Utzon, had never designed anything bigger than a medium-sized housing project. Ove Arup, the engineer responsible for realising his vision, described the cost forecast as having been “prepared, I believe, by some unfortunate Quantity Surveyors under duress in a few hours”.

This is something we might have to sit with, potentially a bit uncomfortably; whatever solution we come up with to all the social and organisational pathologies that stop things from being built, it is unlikely to be something which regularly facilitates things like this. And everyone knew this at the time. The project was started without proper planning, leading to the demolition of millions of dollars worth of wasted work, because as Arup put it “if a fait accompli were not established while Mr Cahill was Premier, the job would probably not go forward at all”.

But a lot of people, including most Sydneysiders, think now, and thought at the time, that it was worth it. There was even substantial support for decades afterward for continuing to finance the huge overrun and the underestimated running costs out of the proceeds of a lottery, meaning that they would largely be paid for by people who didn’t watch much opera.

Conversely, though, when I ask people the same heart-of-hearts question about whether the Concorde project should have gone ahead, they’re much more reluctant to say yes, even though it’s exactly the same sort of white elephant prestige project. And almost nobody will defend NASA’s decision to change their risk tolerance rule from “cancel a launch if there is any doubt about safety” to “proceed with a launch unless there is evidence it is unsafe” ahead of the 1986 Space Shuttle disaster.

I have consciously tried to avoid using the language of “trade-offs” so far in this book. There’s a number of reasons for this. First, it’s not an accurate way to describe most of the problems. Tradeoffs exist when you are at the efficient frontier, when it’s really not possible to get more of one desired thing without giving up another. We are nowhere near that frontier in most of our decision making; we can usually have more of everything we want, simply by spending less on doing stupid things which slow us down and annoy everyone. Removing resources from the problem factory and giving them to the solution factory isn’t a tradeoff, it’s just a gain.

Secondly, I find that the language of tradeoffs is often used in a rather bullying way. If you listen to people who are objecting to something, it’s rare that they don’t understand that there are tradeoffs in policy. They just don’t think it’s worth it. Or they think that the costs are falling disproportionately on them for benefits that go somewhere else. People think that they are sounding wise when they say that “the public want nice things but don’t want to pay for them”. But that’s just what the words “nice things” and “paying” mean. Everyone wants nice things, and nobody wants to pay, they used to teach you this when you did an economics degree.

Here is a real tradeoff, though. We are studying decision making, under conditions of uncertainty. That means that mistakes are inevitable. We can push toward the efficient frontier, to make as few mistakes as possible. But there comes a point at which it is too costly to reduce the error rate any more. Given the context is often that of vitally necessary investments, we cannot even help ourselves to the proverbial wisdom that the only way to avoid mistakes is to do nothing at all, because doing nothing may itself be a big mistake.

So there is going to be a decision to make; will our errors be those of commission, or of omission? It’s not an easy question, and I certainly can’t answer it on behalf of anyone else. I just want to warn you that even if you think you have come up with a solid set of principles to say “yes” to the Sydney Opera House, “no” to Concorde and “definitely not” to the Space Shuttle disaster, circumstances may find a way to make you look a fool, or worse.