Accountability, For Good or Ill

Featured image is the Execution of Admiral Byng – anonymous

It is the nature of elites that they cannot be eliminated, but only replaced and contained. Elites compete with each other for power and influence in their sphere, and whomever has the most influence is the most elite. Those who opt not to struggle quickly find themselves on the outside looking in, as other hungrier competitors overtake them. Politics is the art of determining the rules that the competition will follow.

To the left, the triumph of the common man over distant elites, to the right distant elites trampling the common man.  In the centre – everything good and right and just. h/t Paul Fairie @paulisci

This is something we mostly grasp intuitively in the world of commerce. Businesses compete amoungst themselves for profits and market share, identifying or creating needs and filling them. When the customers care mostly about price we get business elites competing to cut costs and wring out efficiencies. When customers care mostly about quality and reliability we get competitions around warranties and MTBF. When customers care about novelty or function we get competitions around product development and research. Mostly we get competitions involving trade-offs between all three and more besides. The world is full of stories of firms who let themselves get flabby and were overtaken by lower cost competitors, or became sloppy and lost business to more careful enemies, or made bad bets about what customers really wanted and found themselves cut down by more responsive firms.

When the system works well we get benefits for everyone, as some of the smartest hardest working people in the world turn all their brainpower and organisational know-how into shaving 3% off the cost of widget by reorganising the work floor, or the best algorithm builders in the world compete with each other to fine tune music recommendations for the masses. But not all the competitions are socially beneficial, and so we have developed rules which ensure that the competitions are contained within socially beneficial channels. You can’t shave costs by dumping your untreated waste into rivers or water basins, or by not paying your workers, or refusing to make reasonable changes to improve their safety.

An executive at an pipeline firm wants to be environmentally responsible and build his pipelines in a manner that keeps product from leaching into groundwater, but the cost of upgrading is higher than the cost of lost product and the resulting price increase in transport fees will drive business to his less scrupulous neighbour who runs an even leakier operation, and so the executive does nothing. His leakier neighbour also wants to run a leaner operation, but he has activist shareholders who won’t let him make such a large capital expenditure with no prospect of return. A tax on leaked petroleum or a rules about maximum leakage means that though they will still compete on price, that competition won’t be in the form of indifference to the environment, which neither of them really want to compete on anyway.

The danger is that there’s lots of things the executives don’t really want to compete on, many of which are actually socially beneficial. The market forces them to compete on cost, but they would much rather keep prices relatively high. The market forces them to compete on quality, but they would much rather force their customers to buy a replacement regularly. Absent some accountability, rules quickly come to serve the elites instead of the customers.

Now this is a very familiar story to a largely libertarian audience, but of course governance is largely the same. One function of democracy is to tie the game of power to the interests, goals and expectations of the body politic. An electorate that cares mostly about inequality, and which votes accordingly, will produce a politic class obsessed with inequality. An electorate that cares about the state of the economy, or crime, or protecting the culture against outside influence will result in a political class obsessed with being seen to do the same, or again a mix of all those and more.

Ultimately however, many of these competitions will not be socially beneficial. Two politicians, both fully aware of the costs of tariffs will none-the-less be forced to campaign for high tariffs by an electorate that falsely believes helping incumbent firms is the same as helping the economy. Despite knowing the electorate is giving in to dark impulses they would do better to avoid, they none-the-less are forced by the logic of zero sum competition to try to out do each other in denouncing an unpopular ethnic minority, or people with disfavoured religious beliefs. Perhaps fully aware that the public does not possess the expertise to assess the technical aspects of monetary policy, they are none-the-less forced to campaign for crank gold bug schemes, or below (or above) socially optimum interest rates. The solution, from the perspective of the elites, is, by norm or law to effectively prohibit certain kinds of competition that they would rather not be doing in any case.

Instead of setting tariffs in congress or parliament on a country by country basis they sign treaties that bind themselves to the level they wanted anyway. Instead of seeking to crush faiths that their constituents find unsettling, they invent a right to worship, enforced by a third a party, which effectively allows them to ignore faith in practice. Instead of setting monetary policy amoung themselves they give a mandate to an independent third party, which again allows them to compete along axes they find more amenable. Once again of course, it is often the case that elites will bind themselves in ways that serve themselves and not any greater social purpose. The practical effect is that elites can launder their preferences, good and bad, through a judicial and legislative system which insulates them from accountability for the decisions made.

This is the key, to the extent possible to ensure that competition happens on issues where elites should be competing, with enough democracy (and intra-elite accountability mechanisms) to hold elites accountable for the outcomes of their decisions. The problem is that, above a low baseline, calls for more democracy almost always have the opposite effect. A politician who runs and is elected on a platform cannot be held accountable for implementing the contents of the platform, no matter how poorly thought out – it is after all the will of the voters, whether the voters voted the way they did because of or in spite of or indifference to that particular plank. Trump, being elected directly by the primary voters, cannot be held accountable by official party organs for his performance. Jeremy Corbyn, being directly elected by the party members, and so owing nothing to his caucus, cannot be held accountable by them for his failures of leadership. Rather than risk the direct fallout of a decision to leave the EU, or the continued damage of a refusal to do so, David Cameron calls a referendum so that he cannot be held directly responsible for the decision to stay or leave. It is this shirking of responsibility for the governance of the nation that leads to an elite culture devoid of consequence for failure, and complete disconnect between the governors and the governed.

Jean-Claude Juncker
I assure you the people responsible are over there, I had nothing at all to do with the disintegration of my political union

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