The Tyranny of Certainty

There is too much certainty in politics. How often do you hear that policy X will definitely do Y? In political debate you hear very strong opinions on most policies. This, of course, is what you should hear in a vigorous democracy. But there is often something missing in this debate – an admission that there are limits to our knowledge. This is understandable. If a party has to sell a policy the case needs to be made as strong as possible. Admitting that there may be some uncertainty is often too big a chink in the armour. Some recent research sheds light on the sorts of things that influence policy outcomes that have little to do with the policies implemented by governments. They’re useful examples of what can happen when policy makers aren’t looking, can’t see or are wilfully ignorant.

When Tony Blair talked about cutting crime and cutting the causes of crime did he ever mention the role lead poisoning could play in crime rates? Not that I can remember, or at least find on Google. Crime has been dropping throughout the Western world since the 1980s which suggests there may be a common cause given that most countries followed different policies. It has become fashionable since Freakonomics for the drop in crime to be attributed to legalisation of abortions. However, another, more plausible explanation is being out forward. Exposure to lead has been associated with violent behaviour in people. The main way the mass of people got exposed to lead in the postwar period was through petrol and paint. Lead started to be banned from petrol and paint across the world in the 1980s and appears to have been followed by a drop in crime. At the time this wasn’t put forward as a suggestion and was not predicted, so it would be unfair to blame politicians for not taking it into account. Nevertheless, if we had known there was going to be drop in crime how would the law and order policies of Tory and Labour governments been different?

Another interesting bit of research connects the stock market boom of 1982-99 to the demographic spike of the baby boomers. There have been many explanations for the bull market of that time. The usual explanation given is that degregulated markets, rising productivity and globalisation were the main drivers behind this, bringing double digit returns for stock market investors. The reality seems to be somewhat different. There was a huge demographic bulge of baby boomers reaching the height of their earning potential and investing lots of money in stocks and shares. This cohort was at the stage in life where they were investing in relatively risky, but high growth, stocks. Worryingly for us now it looks like we’re going reap the whirlwind over the coming decades as the baby boom generation’s investment decisions change to less risky bonds. According to Michael Gavin, managing director and economist at Barclay’s Capital, the 1980s and 1990s should be seen as an anomaly rather than the norm. Looking back, if this had put forward as the main cause of the stock market boom would the Labour government in 1997 have been as gung-ho about catering to the City’s every need and whim? Would the success of the City have been seen more as riding the crest of a fortuitous demographic wave rather than the result policy decisions in the favour of banks?

The problem is that this is all very difficult to predict. John Kay is right to point out that only fools claim to know the future. What later seems like an undeniable trend may only be predicted by some slightly potty sounding academics. The early advocates of human made global warming faced such criticism. There are also many competing ideas at any given time. There were a number of different factors at work in the two examples above, including government policy. In the end once a party decides on its policies the machine to defend them whirls into action and the hatches are closed. That’s how it has to work. A party announces a policy and releases a minion of ‘28 Days Later’-esque rabid zombies infected with a certainty virus. Nonetheless, every now and again it’s worth sitting back to take in a wider view and remembering that policies are built on the shifting sands of change.

We can’t always know where they will take us, but we still need to make a decision about where to go.

John Clarke blogs at johnmichaelclarke.wordpress.com