Joseph Heath, The Machinery of Government: Public Administration and the Liberal State. New York: Oxford University Press, 2020. 444 pages.
There is a basic dilemma at the heart of public administration in complex, diverse societies like Canada. Because these societies are complex, many of the decisions with the widest impact on the public can only be made by people who are – or at least are advised by – specialized technical experts. But because they are also diverse, there is no broadly accepted normative framework in which technocrats can make these decisions, leading to a basic problem of legitimacy. In The Machinery of Government, Toronto philosopher Joseph Heath explores this paradox and claims to have a solution to it.
The book was written before the COVID-19 pandemic, but two years of public health mandates have really brought both sides of the problem home. Statistics, immunology, virology, computer modelling and professional instinct are all relevant to whether and to what extent changes in law and social behaviour will slow transmission of deadly, contagious diseases. All these disciplines had to be employed to decide whether to allow people to go to restaurants or churches or whether to require airline passengers or public servants to get vaccinated, and the people affected had to largely take the science on faith.
COVID-19 is just a dramatic instance of a much broader, but more abstract, story. Another example is monetary policy, a technical domain in which Prime Minister Justin Trudeau has expressed his lack of interest. In the face of inflation at levels not seen in decades, the Bank of Canada – mostly consisting of macroeconomists – will decide how quickly to increase interest rates. This will immediately affect the bottom line of every homeowner and business. It will be intended to have a direct impact on the labour market and therefore everyone’s wages and many people’s chance to have a job at all. The hope is that affecting aggregate demand will reduce the now-alarming rate at which the price of consumer goods is increasing. These highly consequential and immediate decisions are nonetheless spoken about in terms that only a tiny group of specialists purport to understand.
While central banks and public health officials are especially visible examples of technocratic power, there are countless other issues that are, in practice or in theory, resolved by specialized decision-makers, typically with some professional or technical accreditation. That is how we decide who gets into the country, who can build what where, what level of industrial pollution to allow, how quickly natural resources may be harvested, when children may be removed from their parents, when businesses need to be broken up and countless other questions that silently or loudly affect us all.
Some but not all such decision-makers are integrated into a formal departmental or ministerial structure, at the top of which stands a cabinet minister accountable to the legislature and thereby the electorate. Central bankers are different in that they have legal guarantees of independence; the same is true of prosecutors, utility regulators, labour boards, telecommunications regulators and many others. In all cases, these decisions, in practice, necessarily require a large degree of autonomy.
By comparison, Parliament and legislatures pass a tiny number of new rules in the form of statutes and budgets: when these are important, they almost always require, and at most structure, further decision-making by unelected officials. As Heath demonstrates convincingly, while specialized public servants are supposed to be – and usually are – accountable in some sense, this accountability is complicated and can rarely be understood as direct supervision by elected politicians.
Even the most populist of us will in practice have to concede that – at least in some cases – people with training in scientific, medical and engineering disciplines know something we don’t. We make that concession every time we undergo anesthesia or step into an elevator. The epistemic claims of some other disciplines modelled on natural science – macroeconomics comes to mind – are more disputable.
But whether the claims to knowledge are flimsy or secure, they are necessarily too limited to be the basis for decisions. What characterizes the break between post-Galileo empirical science and more traditional wisdom claims is that science, as we now understand it, is confined to descriptive claims about how the world is, not how it should be. At most, science can say that if you want A, you must do B. It cannot say whether A is worth striving for or whether it outweighs C, some unwanted effect of B. The maxim that we should “listen to the science” is therefore naive, if what we are listening for is a decision on what to do.
Public policy decisions thus cannot be derived from solely descriptive truths. It may be a fact that vaccines have a certain efficacy rate against infection by a certain variant of SARS-CoV-2, but it is only with necessarily controversial prescriptive assumptions that this can be translated into a decision that people in certain jobs must be vaccinated. Whether the bodily autonomy of the vaccine sceptic should give way to the biosecurity of the immunodeficient airplane passenger is not a scientific question.
Even if factual claims about the causal impact of increases in interest rates on inflation and unemployment were much more secure scientifically than they are in the real world, only additional normative assumptions could tell us whether a risk of higher unemployment is better or worse than a risk of higher inflation. In the modern scientific world picture, the technocrat cannot claim any special expertise in how things should be. Nor are technocrats representative of the people affected by their decisions, either in the sense of being directly accountable to them or in the sense of being demographically similar.
There is thus a basic dilemma. The people and their representatives cannot know enough to sensibly make many important decisions, but the people with the best claim to such knowledge are only loosely accountable to the people for the fundamentally normative choices that are necessarily involved.
The fraying of consensus over what to do about the COVID-19 pandemic was partly about pseudoscience and “fake news.” But the fraying also reflects the truth that, while science has a common language in which to discuss what is true or false, it has undermined the idea that there is a common metric for what is good or bad. Along with other developments in the modern West that seem irreversible, science has certainly dealt a blow to the idea that we could ever recognize a moral expert, or respect a self-proclaimed one.
The great merit of Heath’s book is that he puts this problem front and centre. He painstakingly reveals that fully transparent political accountability doesn’t solve the problem because of the information gaps necessarily involved, and a nonnormative, purely technical approach to public administration doesn’t solve it either.
Heath is nonetheless an optimist who thinks there is a way to resolve this dilemma in a way that is compatible with a deeper accountability of bureaucracies to citizens. He makes two big claims:
- Bureaucracies in societies like Canada have already evolved an internal system of ethics that successfully negotiates this dilemma.
- The key value in this system is “efficiency,” understood in the sense of neoclassical welfare economics.
For Heath, efficiency is the core value not just of economic bureaucracies but even of health, environmental and welfare bureaucracies, like public health agencies managing the COVID-19 pandemic. It may be mitigated somewhat by liberty or equality, but it is the default value of public administration and policy.
Heath takes what is known in philosophy as an “expressivist” approach: while he does not claim that bureaucrats would explicitly understand what they are doing in his terms, he does claim that he is making explicit what is already implicit in their practices, at least when those practices go well. He therefore denies that he is imposing some extraneous theory from the outside.
At first blush, Heath seems to have tried to resolve one problem by creating a deeper one. While “efficiency” is at least arguably accepted as a central value for economic policy, the idea that efficiency should be at the core of social, health or environmental policy is itself paradoxical. Referring to efficiency to decide how to deal with a deadly disease, family abuse or refugee determinations seems cold and bloodless, if not sociopathic and evil. Efficiency is controversial even in the economic sphere, especially on the left. It is definitely not how most social workers or physicians are trained to think. Even less is “efficiency” the kind of thing that has a wide social consensus behind it: first-year economics courses are famously counterintuitive.
Heath sees the problem and patiently explains what he means by “efficiency” in the hope of making it both plausible as an organizing principle for how bureaucracies actually make decisions and desirable as legitimizing what they are up to. As Heath explains, a decision is “Pareto efficient” if it makes at least one person better off while making no one worse off. The classic example for economists is a voluntary trade between fully informed parties in circumstances where their transaction affects no one else. Assuming a fairly low level of rationality, neither party will enter into the trade unless it makes them better off by their own lights.
The critical philosophical move by liberals (broadly understood) is to say that, under these assumptions, nobody else has a legitimate objection to the trade going through. Efficiency is a reason that the contract should go through, but it is a reason that both the parties ought to grant on the basis of their own values and therefore is not imposed on anyone. The same logic that applies in pecuniary transactions applies as well to forming a family or other relationship, joining a church or temple, or identifying with a gender or ethnic group. As long as everyone directly involved is informed and agrees, and no one else is affected, efficiency and liberty are the same, private ordering should be respected, and doing so is following a norm but not imposing a controversial version of the good.
Because real-world markets frequently fail to meet the idealized conditions in which everyone affected is better off by their own lights, efficiency is not confined to permitting voluntary arrangements and can justify overriding them. A situation in which efficiency and private ordering diverge is, in the jargon of neoclassical economics, a “market failure.” For Heath, understanding the neoclassical logic of market failures allows efficiency, as a norm, to escape being the domain of the pro-capitalist right and allows it to be the unknown common ground of people of varying political beliefs in societies like Canada (which, in an earlier book, he described as The Efficient Society).
As a theorist of business ethics, Heath has argued that commercial morality can be explained as a way of addressing market failures in private-sector contexts. In The Machinery of Government, he expands this to the public sector. Market failure explains why efficiency diverges from liberty as understood by classical liberalism. It is commonplace to see environmental regulation, for example, as a way of addressing the straightforward market failure when the effects of pollution fall on people who have no market relationship with the polluter. Other standard functions of the modern regulatory, welfare state – including social programs usually thought to be motivated by egalitarianism and solidarity – can be explained through information asymmetries, adverse selection insurance dynamics and other suitably technical terms of neoclassical economics.
To be sure, these situations usually provide no single Pareto-optimal solution, so it becomes necessary to substitute the concept of “Kaldor-Hicks” efficiency, after left-wing economists Nicholas Kaldor and John Hicks. A decision that necessarily has winners and losers cannot be Pareto efficient, but the choice can be made so that the winners could (in principle) compensate the losers. The decision leaving the greatest benefit to the winners (by their own lights) after they compensated all the losers is considered Kaldor-Hicks efficient: since governmental decisions are never without some losses, this is the relevant conception of efficiency.
This is, and should be, more controversial than Pareto efficiency since the “compensation” is hypothetical rather than real: in some – perhaps most – cases, it is to the one who hath that more shall be given. One idea is that over the long run the losers in one situation will be the winners in another, so that a large number of Kaldor-Hicks efficient decisions will be good for almost everybody. Another is that the compensation function can be placed in another area of policy, such as a progressive tax system.
Kaldor-Hicks efficiency can be relevant to decisions that go beyond money. The regulatory state is constantly faced with tradeoffs between risks of premature death or disease and economic activity. While the COVID-19 pandemic perhaps made this more obvious, the same choice exists whenever there is a decision about a speed limit or an occupational safety standard. If in one area of policy the state imposes a higher economic cost to save a life than in another, there is an opportunity for efficiency. By equalizing the implicit value in the two areas, more lives would be saved for the same economic cost, less economic cost would be imposed for the same number of lives saved or some combination of the two.
Cost-benefit analysis around lives offends industries that are costing more lives than average (most egregiously by imposing air pollution). It also offends widespread moral intuitions – and therefore, as Heath notes, is only mentioned in legislation when it is forbidden. Nevertheless, it has expanded in Western countries. Heath plausibly generalizes this to note that cost-benefit analysis fits well with an ethic that is internal to the practice of science-based regulation and modern bureaucratic liberalism.
One objection would be that actual existing administrative systems are very far from any technocratic ideal of evidence-based cost-benefit perfection. Policy initiatives are often poorly evaluated for effectiveness. Anyone who has been in an area of public policy for any length of time has seen fads come and go without much rigorous analysis. Moreover, there are basic issues with making cost-benefit analysis determinative, including the inherent uncertainty of social science, the lack of a methodologically defensible “social discount rate” and methodological questions about the robustness of many technocratic ways of evaluating nonpecuniary goods like pristine nature or social connection. Heath’s response to these objections is that efficiency is a regulative ideal, and that of course there is much work to be done to improve actual policy and administration to bring it closer to this ideal.
In addition, there are deeper normative objections that question whether efficiency is what we should be aiming for at all. Some of the critics base themselves in traditional natural law and virtue ethics; others in radical critiques of capitalism. Heath recognizes, but does not really address, these objections. He feels he can ignore any foundational debate because he is trying to express the normative standards already implicit in successful bureaucratic practice. For him, the payoff is that it can both explain and justify specifically administrative decision-making. The political system can and will occasionally depart from the most efficient solution in favour either of equality (the value of the left) or freedom (the value of the right), but this is not a problem since what the technocrat needs is a default system of normativity that applies when the political system says nothing.
On the basis of my experience as a public lawyer working for government, I think there is much to recommend Heath’s explication of what is implicit in administrative practice. In one respect, I think he even undersells things, because he argues that administrative and constitutional law place an external constraint on the internal bureaucratic value of efficiency in favour of a more classically liberal value of freedom. In this chapter, his examples tend to be American, even though he largely refers to Canada for his examples of administrative practice.
In fact, outside the United States, the dominant principle in public law – whether constitutional or administrative – tends to be “proportionality,” which can be understood very much in efficiency terms. For example, under the Canadian Charter of Rights and Freedoms, limits on rights will usually be upheld if they pursue a legitimate public goal and “minimally impair” the interests of the rights holder: a test that explicitly draws on Pareto efficiency. Similar standards are adopted by European courts and in other liberal democratic countries with active judicial review. While the American situation is more complicated, there too “least drastic means” tests are important in constitutional law, and American federal courts have gone further than most in recognizing cost-benefit analysis as the gold standard for administrative decision-making.
What is more disputable is whether this is a good or even a sustainable thing. Administrators need to find some way of making choices, which requires a normative standard. But they also need to be politically and socially neutral. Efficiency can, Heath thinks, achieve both goals, at least in North Atlantic societies that have modern liberalism embedded in their institutions and culture. The problem is that Heath paints a picture of a very tame kind of politics, in which a pro-redistribution left pushes to ameliorate efficiency with equality and a pro-market right emphasizes economic growth, but everyone basically accepts the framework of efficiency and philosophical liberalism. If that was a reasonable idealization of politics in the 1990s, it bears no resemblance to the politics of the West today.
The right is increasingly emphasizing the importance of the state defending an existing national culture from what it sees as demographic and ideological threats of uncontrolled immigration and wokeness. In so doing, it is denying the efficiency hypothesis that one person’s set of first-order values should count the same as another’s, which for populist nationalists undermines the sense of national community necessary to have a functioning state at all. Moreover, populist nationalists are aware that technocrats have cultural values that are different from their own. They are not going to accept efficiency as neutrality, and their leaders will increasingly characterize technocrats as the “Deep State” in the hope of obtaining less constrained power.
Equally, the centre-left emphasis on addressing market failures and redistributing income is losing out to a more radical view that this kind of thinking is at the root of a half century’s increase in material inequality and loss of working-class power. The most sophisticated and influential version of this critique can be seen in the work of economist Mariana Mazzucato. In a number of books, she has argued that the state must do more than promote efficiency: it must have a vision of change and drive the private sector toward it.
In her most recent book, Mission Economy: A Moonshot Guide to Changing Capitalism, Mazzucato draws on the experience of the Manhattan Project and the Apollo program to argue that successful public administration is primarily about vision and experimentation, not correcting market failures. The disagreement between Heath and Mazzucato can be seen most directly in the difference between a climate change policy centred on carbon pricing and subsidies, on one hand, and one that would put transforming the energy and agricultural systems of the world at the heart of a new, ambitious industrial policy (the “Green New Deal”), on the other.
Heath knows that populist politicians will promote what he sees as inefficient policies, and he sees what those populists would regard as the “Deep State” as an important safeguard for liberal values. The problem is that any plausible vision of political neutrality has to be defined in terms of the real political divisions in the society: if they are between a nationalist populism and a progressive one, the very fact that bureaucracies in the West are oriented to efficiency may mean that we are all in for a bumpy ride, in which decision-makers and angry citizens find it harder and harder even to understand each other.
The problem is that Heath does not address how technocratic decision-making is to be reconciled with political struggles over deeper issues of identity and vision. One flaw in Heath’s discussion is that he never really integrates technocratic efficiency thinking with popular input. Heath sees politics and democracy primarily as a threat to liberal values. But we have seen not only that technocrats become viewed as out of touch without popular input, but also that they make profound mistakes: the hollowing out of manufacturing capacity in an unqualified embrace of globalization, the Iraq war, the 2008 financial crisis and its aftermath of self-defeating austerity and the opioid crisis, to name a few.
One possible proposal is the increased use of sortition, the random choice of citizens to act as deliberative decision-makers. There has been some interest in sortition in philosophical circles, but Heath seems unwilling to give populism its due. While Heath’s argument helps us understand public administration and could even make it work better, he is ultimately too sanguine about efficiency and the internal logic of technocracy to really help us get out of what he has rightly identified as a crucial dilemma.
