The pretence of knowledge

One of the more unpleasant aspects of the New Labour government was its anti-Hayekian pretence that central government could acquire knowledge which, in fact, is unobtainable. The coalition has inherited this boneheaded idea.
Take Vince Cable’s recent speech:

There is no justification for taxpayers money being used to support research which is neither commercially useful nor theoretically outstanding.

The problem here is that it is impossible to predict what research will be commercially useful. History is full of examples of businessmen and scientists - let alone politicians - utterly failing to anticipate commercial uses, for example:

“There is not the slightest indication that nuclear energy will ever be obtainable”
"The wireless music box has no imaginable commercial value.”
"Radio has no future. Heavier-than-air flying machines are impossible. X-rays will prove to be a hoax."
"While theoretically and technically television may be feasible, commercially and financially it is an impossibility."
“There is no reason anyone would want a computer in their home."
“This 'telephone' has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us."

The notion that government can cut only “useless” science funding is an egregious pretence to know things that cannot be known. Instead, such cuts operate much as financial constraints for business operate: they diminish the ecology upon which natural selection operates.
The only reason I hesitate to call Cable a witless imbecile is that I doubt that he actually believes what he says.
Speaking of witless imbeciles brings me seamlessly to Gideon Osborne. He says:

People who are disabled, people who are vulnerable, people who need protection will get our protection, and more.
"But people who think it's a lifestyle choice to just sit on out-of-work benefits - that lifestyle choice is going to come to an end.

Now, leave aside the hypocrisy of the heir to a multi-million fortune whining about folk getting something for nothing. Leave aside the fact that there’s little point encouraging people to find work if there’s none to be had. And leave aside the fact that the unemployed are, on average, significantly unhappier than those in work.
Even if we ignore all this, there’s still a problem here. It is, practically speaking, almost impossible for the state to distinguish between the “vulnerable” and the “workshy”. A more intrusive benefits system will bear heavily upon those with poor mental health, low IQ and poor social skills, whilst “scroungers” will continue to game the system.  The distinction between deserving and undeserving poor might seem clear to bar-room bigots. But it is almost impossible to apply it to millions of individual people, except by creating a bureaucracy so large as to offset any savings on benefits.
Osborne is doing just what Cable and New Labour did. He’s assuming the state can know things which in fact it cannot.
Good Hayekians should be sceptical of what Osborne and Cable are claiming. Sadly, though, I suspect that  the majority of people who claim to admire Hayek are wedded more to class war than to Hayek’s actual ideas.

Comments

[Phil]

Well, obviously they'll fix the benefit system so that it consistently and exclusively penalises the people who try to game it. (I wish I was senior enough in the Civil Service to actually propose that.)

[Philip Walker]

For added colour: It was Lord Kelvin, one of Britain's greatest Victorian physicists, who said "Heavier-than-air flying machines are an impossibility." He also said, "There is nothing new to be discovered in physics now." That was in 1900, five years before Einstein published two papers, one of which was to be the foundation of special relativity and the other, quantum theory, and which between them would set the stage for the twentieth-century revolution in physics.

[Luis Enrique]

accepting that impossible to predict what research will be commercially useful, does this mean we can know nothing about the average quality of research?

Are there diminishing returns of quality of research to spending on it? i.e. as more money is available, do more mediocre researchers get funded? If so, it might be valid to say there's no justification for taxpayer money being used to fund all this rubbish research, and we should cut back a bit and raise the average quality.

This is admittedly a generous interpretation of Cable

[PT]

"The only reason I hesitate to call Cable a witless imbecile is that I doubt that he actually believes what he says."
Politicians these days say whatever seems at the time to be a popular soundbite. They are all concentrating so hard on being media savvy and on saying nothing that someone might challenge them on, ie saying nothing at all, that they all come across as witless imbeciles.

[Prateekbuch]

Cracking post.

One of the major criticisms the Tories and Lib Dems had of NuLab government was that it felt top-down, central diktat could reform and improve public services - which was always doubtful at best. Turns out they now want to reform science (which isn't a public service anyway, more an endeavour which is in part publicly funded) by, err, top-down central diktat - or something along those lines.

I've blogged about this myself ( here and here), would appreciate comments - oh and Chris, what price you joining Twitter so that these brilliant blogposts of yours can get an even wider audience...? :-)

[Prateekbuch]

oops, links didn't work for some reason - my posts were http://teekblog.blogspot.com/2010/09/politics-of-science-funding-in-two.html

and

http://teekblog.blogspot.com/2010/09/politics-of-science-funding-in-two_09.html

[Sam]

There is certainly "a problem" with the feckless and workshy living comfortably on benefits whilst their employed neighbours work themselves into the ground in order to support them. But, as you point out, it's a hard problem to fix.

The easy fix is to get rid of the perverse incentives to remain unemployed. I have a relative on benefits. She has plenty of mental health issues, and is vulnerable and easily taken advantage of. She'd quite like to work, but if she takes any job that she's actually capable of doing, she'll be worse off financially, and if she then loses that job, she'll have a huge fight to get her benefits restarted. So it makes no sense at all for her to even try to find a job. I suspect she is not unique.

I might suspect that if you reduce the effective marginal taxation rate so that the minimally-skilled "workshy" have an incentive to work, the problem will largely solve itself.

[Marcin]

I just had the dubious pleasure of using the job centre. They were incapable of actually telling me about any training or education opportunities; the rest of the awful experience I will save for a blog post, but my overall impression was that the system exists to provide the appearance of helping people find work, while actually just providing a series of traps to justify docking their benefits.

[JSM]

Not Vince Cable's finest hour at all - but how should you decide on the scale of governmental science funding? By plucking a percentage arbitrarily out of the air, by some "me-too" statistical comparison with other countries, by what the last lot did plus inflation, ...?

[Jim]

"It is, practically speaking, almost impossible for the state to distinguish between the “vulnerable” and the “workshy”."

I agree. But what do you propose to do about the situation? Or do you propose to merely let the welfare state expand indefinitely, until it consumes us entirely?

My suggestion is the time limiting of benefits to a certain percentage of ones adult life. Thus there is no need for a big bang change in who gets what, but merely informing people that they cannot continue as they are indefinitely, and must make alternative arrangements to pay for themselves eventually. I suspect there would be a considerably different view among those contemplating moving from benefits to work, if they thought the benefits would not last forever.

The benefit system was supposed to be a short term safety net, allowing people to survive periods of unemployment or ill health, not to support them from cradle to grave.

[ortega]

But of course many expending cuts will affect important and necessary things ! That's why we call it a crisis! Otherwise it will just be 'stop the nonsense'.

[Dipper]

The only kind of research the government should pay for is the non-commercial kind. And as for theoretically outstanding, you can't just order that up on tap.

But more than this, what should the primary concern of government be? It shouldn't be economic policy. The same analysis and Economic policy advice is available to all governments virtually free, so why do countries differ in their economic performance? Because of the knowledge infrastructure and cultural environment of each country. So the government's primary concerns should be cultural, not economic

[Terrapin]

We're underestimating the government's ability here, surely? After all they "know" a great deal. For certain. At least that's what they would have us believe. They "know" we need to replace Trident (so we needn't include the tricky question of why we need it in the strategic defence review). They "know" that Labour's school buildings spending programme was so wasteful it had to be cancelled. Oh but that one is now up for review. And they "know" there are millions of pounds of "wasted spending" in areas like the police. Taming science, where there may well be less votes to be won or lost must seem like a piece a piece of cake.

[Julian Hofmann]

For all the opprobrium that Cable has earned there is a paradox to funding research. Basically, its bureaucratisation means organisations get good at spending money, rather than producing much to justify the outlay. Also the "fund all research" argument doesn't take account of what the system's strengths and weaknessess are. If we produce good medical and engineering technology because of a good base of skills then it seems logical to continue backing a winner.

[Glenn]

The academic research assessment system scores them highly for publishing journal articles. It does not reward societal or economic benefits deriving from research. Incentives matter.

[Phil]

"But what do you propose to do about the situation? Or do you propose to merely let the welfare state expand indefinitely, until it consumes us entirely?"

[hak]CitznsBsicIncm![koff]

[Joe Otten]

Ouch yes I pretty much agree with this post despite being a supporter of the coalition.

Of course the debate between justifying and opposing cuts is artificial. The argument is cuts now or cuts later - and whether putting off the pain makes it any better or worse. Anybody merely opposing cuts without £150bn/yr in their back pocket - or at least some way to convince the public they should pay much much more tax - is a hypocrite.

Oh and wasn't it Lord Kelvin who disputed the geological evidence for an earth millions of years old or more, saying that the Sun, being made of coal, would have burned out in much less time.