You might not think the two have much in common – and the silliest, most damaging, monetary policy decisions (think of the MCI) were all our own reasoned doing. But one of New Zealand’s most stimulating left-wing writers, Daryl McLauchlan thinks that monetary policy offers a model for how decisions about marijuana should be made.
When I saw his article the other day, under the heading “Why a public vote is the wrong way to determine drug policy”, I assumed it was going to be something about the (de)merits of referenda, reminding readers that we are primarily a representative parliamentary democracy, not one where most decisions are made by plebiscite. There are some merits to that particular argument – and some counter-arguments. But that turned out not be McLauchlan’s argument at all.
Instead, it was a bid to get not just the public out of any decisionmaking around drugs, but MPs as well. McLauchlan doesn’t want elected people, or those who elect them, making the decisions, but “experts”.
Advanced liberal societies often solve problems of this class, not by politicising them further but by removing them from the political system and building independent, technocratic institutions. Elected MPs used to make decisions about what the official cash rate should be and which pharmaceutical drugs should be funded in the public health system, and they were so obviously terrible at this they devolved that power to the Reserve Bank and Pharmac. I think we need to do that with drugs.
I’m rather sceptical of the cult of the expert, at least as any sort of decisionmaker. There are plenty of decisions – personal and societal – where we benefit from expert technical advice, whether it is on treatment options for sickness or injury, house renovations, or how best to conduct a war. But advice and decisions are two quite different things: we don’t, for example, want our generals deciding which wars to fight. I wrote a post on these general issues – arguing that experts should be harnessed for their advice, not allowed to set policy courses – a couple of years ago.
I don’t know a great deal about Pharmac and pharmaceutical drugs – although I do note that the ultimate decision (how much taxpayers’ money to spend on such drugs) is very much one for MPs and ministers (those we elect, and those we can toss out again). But I do know quite a bit about monetary policy and decisionmaking frameworks for it. And we have the added bonus of a recent book, by a former Deputy Governor of the Bank of England, reflecting on appropriate decisionmaking structures in a democratic society, working outwards from his experiences with monetary policy and banking regulation to offer a more generic framework for assessing whether or not decisions should be handed over to independent agencies. I wrote various posts about it last year, and reviewed the book for the international central banking publication Central Banking.
Tucker sets a list of “delegation criteria” as follows:
A public policy regime should be entrusted to an independent agency insulated from day-to-day politics of both elected branches of government only after wide public debate and only if
- The goal can be specified.
- Society’s preferences are reasonably stable and concern a major social cost.
- There is a problem of credibly committing to a settled policy regime.
- The policy instruments are confidently expected to work and there exists a relevant community of expertise outside the independent agency.
- The independent agency will not have to make big choices on distributional trade-offs or society’s values or that materially shift the distribution of political power.
- The legislature has the capacity, through its committee system, properly to overseee each independent agency’s stewardship and, separately, whether the regime is working adequately.
- The society is capable of bestowing the esteem or prestige that can help bind the independent agency’s policy makers to the mast of the regime’s goal.
One can mount a reasonable argument that routine monetary policy decisions meet this standard. After all, the overarching goal of monetary policy is set by Parliament, and the specific goals (under the legislation passed late last year) are directly set by the Minister of Finance. And that legislation is backed up by a fairly widely-accepted literature that there are no long-term adverse trade-offs between inflation and output. The Reserve Bank still has some important discretionary choices – those short-term trade-offs can matter – but they aren’t choices about what sort of society we want to be, or who – which sectors/classes – will benefit at the expense of others.
Even then, the case for an operationally independent Reserve Bank conducting monetary policy is less strong than it once seemed – those short-term tradeoffs are more important than the designers of the 1989 Act (which bestowed operational independence) really appreciated, and whereas the long-running argument was that inflation couldn’t be kept low enough without independence, we’ve now had a decade when central bankers haven’t delivered inflation as high as society (represented by its elected politicians) asked them to. Throw in serious doubts about the effectiveness of parliamentary monitoring and scrutiny, and it is hardly an open and shut case any longer.
I’m not arguing to remove operational independence from the Reserve Bank – although our system in particular still leaves far too much power in the hands of a single unelected official, who isn’t even appointed by people who were elected. But if day-to-day monetary policy decisions possibly pass the Tucker test, I can’t see how decisions about the legal status of marijuana (or other drugs) could possibly do so.
After all, to set up such a regime – in which some independent board (presumably appointed by ministers) would make decisions around which drugs should be legalised, for whom, and under what terms and conditions – authorising legislation would need to be passed by Parliament. And that legislation would – under decent principles of legal drafting and institutional design – need to outline criteria that the independent agency would have to use to make their decisions. Of course, those principles could be waffly, non-specific, with no clear sense of which tradeoffs matter or which considerations should get the greatest weight. Some might perhaps even be mutually inconsistent.
But that is no decent basis for delegating power in a democratic society. And to get to a serious list of goals and constraints, one would have to go through much the same sort of contentious political process involved in either legislating directly or using a referendum to make decisions about legalising (or not) marijuana. A goal might be able to be specified – although I doubt it – but there is no way that, at this point in society’s evolution, social preferences around these issues could reasonably be described as stable. We can’t even agree on what the relevant criteria, or relevant sets of expertise, might be. There are libertarians at one hand, people opposed to allowing any intoxicating substances at the other, and all manner of intermediate positions, shaped by all sorts of different considerations (be it about health, crime, freedom, responsibility, nature of society etc). That is the stuff of politics. Competing visions, competing philosophies, competing values, competing intepretations of evidence (or even of what evidence is even relevant). It is what politics is about, and only political processes have the legitimacy to make such decisions (messy as they often will be).
And even if legislation were able to be passed, handing these big decisions over to unelected unaccountable people sitting on a committee, what is gained? There is no stable agreed body of expertise relevant to making these decisions – some will emphasis criminal aspects, some health and mental health aspects, some political philosophy, and some….. By contrast, given a specific inflation target there is a reasonably specific set of expertise relevant to monetary policy decisions. And boards and committees don’t just appear out of thin air: the members are appointed, by elected politicians. And so, most likely, you policy set depending on the preferences of the politicians who happen to be doing the appointment at the time, and yet without any direct accountability. Or appointees purusing their own interests, ideologies or preferences – again with no direct accountability.
And, as I’ve mentioned previously around monetary policy, the willingness and/or ability of our parliamentary select committees to provide serious scrutiny and accountability for indepedent agencies is…..to put it politely…..limited at best. Limited time and limited resources matter, but so do does careerism – making life awkward in a select committee might be just what the public interest demands, but it isn’t a reliable path to the next promotion into the ministry.
I’m not wedded to referenda in preference to Parliament itself making final decisions (although in general I quite like the model in which referenda are used to give a final yes or no to specific legislation, so that we know exactly what we are – and aren’t – voting on) but I can’t see how appropriate policy around drugs is, by almost any test, something that should be decided by people we haven’t elected – whether judges (the unelected committees that have too much policy say in the US in particular) or statutory boards and committees. Why preference the preferences and biases of those people over our own, especially as we have ample opportunity to hear – and follow or discount – their advice anyway?
I ended my previous post, responding to Sebastian Mallaby’s call for more powers to be handed to “experts”, this way
Like most cults, the “cult of the expert” is more dangerous than Mallaby – or most of the expert class – acknowledges.[ partly because “experts” have a track record of badly misjudging all sort of key issues] And hotly contested political debate, messy as it often, wrong directions that it sometimes takes, are how we make the hard choices, the trade-offs, amid the inevitable uncertainty. Abandoning that model is akin to gutting our democracy of much of its substance. So I still want an expert operating on my child, but I want parliaments making laws and setting taxes (not officials) and parliaments taking us to war (not generals).
And I want MPs – who we can toss out – or the voters making to key decisions around whether or not to liberalise drugs. As slowly as is necessarily to thrash through all the details and alternative perspectives relevant to such decisions.