The tail wags the dog

In his 2018 book Expert failureRoger Koppl discusses the influence of ‘big players’ on expert opinion (pages 214-215, 230). A ‘Big Player’ is an entity whose mere presence can influence individual behavior. Where Roger gives the example of the IPCC and the intelligence system in the US, it seems that we now also see this reflected in policy. Both major presidential candidates were major ‘buyers’ of expert advice and it appears that their mere presence is enough to influence the market for expert advice. Both pursued incredibly heterodox economic policies (for Trump: protectionism; for Harris: price controls). And despite the vast majority of professionals opposing this policy, both experts have been willing to give their policies credibility.

This leads me to think about an important problem with ‘science-driven policy’. While science can be used to influence policy outcomes in potentially useful ways (for example, a carbon tax can be used to reduce carbon emissions and combat global warming), the tail can also be wagging the dog . Policies can be defended and scientific justifications sought. Consequently, this can lead to a game of whack-a-mole where a rotating list of (often contradictory) justifications are suggested and discarded as the situation warrants. In turn, actual policy discussions go nowhere because the goalposts are constantly shifting. In short, expert opinion is about justifying preferable policies, rather than policies that try to solve a particular problem and expert opinion helps do so.

We saw this with the Harris campaign when she floated the idea of ​​a federal ban on grocery price gouging. The policy is non-specific, and we saw few economists come out to justify its claims: price controls in an emergency do not negatively impact welfare, price controls in a monopoly can promote welfare, price controls in a state monopoly can . can be welfare-enhancing, price controls can be good in an inflationary environment, etc. All these justifications sometimes require mutually exclusive assumptions about market conditions. They can’t all be correct. The policy is looking for justification and the ‘big player’ can offer enough to influence the expert opinion.

In an extreme case, the influence may even be enough to influence experts to recant previous arguments! Economist Justin Wolfers of the University of Michigan is one such example. In Wolfers’ Principles of the Microeconomics Textbook with Betsey Stevenson, Wolfers and Stevenson discuss legislation against price gouging as a form of price control and its economic consequences (see page 146, 2nd edition). However, at one August 28 interview with CNBCWolfers denied that legislation against price gouging was a form of price control.

We saw the same thing with the Trump campaign: the justifications for tariffs ranged from national security, to protecting jobs, to fair trade, to reducing the trade deficit, to optimal tariffs, to revenue maximization, to externality, etc.

When the tail is wagging the dog (when policy leads to justification), policy discussions become difficult; Because no justification, no problem is posed, it is malleable and so defenders of the policy simply move from one to the other. The scientific expertise of the justifiers lends credibility to these plans.