The Centre for Independent Studies’ Peter Kurti asks “ Should those who know best rule the rest of us?” In this episode, host Gene Tunny chats with Peter about his new paper “Authority, Expertise and Democracy,” which explores the role of experts in government and how society should best utilize their knowledge in public policy making. They delve into the question of when it makes sense to delegate power to experts and the relevant considerations. The role of experts in decision making around the pandemic, monetary policy, and AI are discussed.
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About this episode’s guest: Peter Kurti
Peter Kurti is Director of the Culture, Prosperity & Civil Society program at the CIS. He is also Adjunct Associate Professor in the School of Law at the University of Notre Dame Australia, and Adjunct Research Fellow at the Australian Centre for Christianity and Culture at Charles Sturt University. He has written extensively about issues of religion, liberty, and civil society in Australia, and appears frequently as a commentator on television and radio. In addition to having written many newspaper articles, he is also the author of The Tyranny of Tolerance: Threats to Religious Liberty in Australia; Euthanasia: Putting the Culture to Death?; and Sacred & Profane: Faith and Belief in a Secular Society, published by Connor Court. Peter is a Fellow of the Royal Society of Arts, and an ordained minister in the Anglican Church of Australia.
What’s covered in EP201
[00:02:30] Authority and experts in government.
[00:04:07] Impact of experts during COVID.
[00:09:29] Discrimination and lockdown restrictions.
[00:13:29] Delegating power to experts.
[00:18:12] Politicians’ difficult role in decision-making.
[00:21:11] Trade-offs in decision making.
[00:27:23] Vaccine mandates.
[00:34:27] AI and expert advice.
[00:37:35] Expert advice and self-interest.
[00:37:59] The importance of delegation of monetary policy decisions.
[00:40:19] Expert Failure book by Roger Koppl.
[00:43:33] Experts and human failings.
[00:50:32] The length of the leash.
[00:52:12] The role of experts in policy making.
Links relevant to the conversation
Peter Kurti’s new paper for the Centre for Independent Studies:
Authority, Expertise And Democracy. Should those who know best rule the rest of us?
Episode on Public Choice theory mentioned by Gene:
EP93 – Public Choice theory with Dr Brendan Markey-Towler – Economics Explored
Transcript:
The role of experts in a democracy: pandemics, monetary policy & AI w/ Peter Kurti, CIS – EP201
N.B. This is a lightly edited version of a transcript originally created using the AI application otter.ai. It was then checked over by a real human, Tim Hughes from Adept Economics, to pick out any howlers that otters might have missed. It may not be 100 percent accurate, but should be pretty close. If you’d like to quote from it, please check the quoted segment in the recording.
Gene Tunny 00:06
Welcome to the Economics Explored podcast, a frank and fearless exploration of important economic issues. I’m your host Gene Tunny. I’m a professional economist and former Australian Treasury official. The aim of this show is to help you better understand the big economic issues affecting all our lives. We do this by considering the theory, evidence and by hearing a wide range of views. I’m delighted that you can join me for this episode, please check out the show notes for relevant information. Now on to the show.
Hello, thanks for tuning in to the show. In this episode, I chat with one of my colleagues at the Centre for Independent Studies, Peter Kurti. Peter is director of the Culture Prosperity and Civil Society programme at CIS. He is also Adjunct Associate Professor of Law at the University of Notre Dame Australia. Peter has written a great paper for CIS on the role of experts in government. The paper is titled “Authority, Expertise and Democracy – Should Those Who Know Best Rule The Rest of Us?” In the paper, Peter asked how society should best use experts in public policymaking and he provides some very useful tips. This is a really important issue given how much we rely on experts. At different times, experts have wielded a lot of power. Dr. Anthony Fauci in public health and Jay Powell in monetary policy come to mind. When does it make sense to delegate power to experts? What are the relevant considerations? Peter Kurti provides some great advice in his latest paper, which we talk about in this episode. Okay, let’s get into it. I hope you enjoy my conversation with Peter Kurti.
Peter Kurti, thanks for joining me on the programme.
Peter Kurti 01:59
Thanks, Gene. Great to be with you.
Gene Tunny 02:02
Very good Peter. You’ve recently had a new paper published by the Centre for Independent Studies, “Authority, Expertise and Democracy – Should Those Who Know Best Rule The Rest of Us?” I’d like to ask to begin with what got you interested in this issue of expertise? Why did you think this was a good topic to write a paper on?
Peter Kurti 02:24
This all started really during the period of COVID and the lock downs. And I felt that here in New South Wales, and I know in other parts of the country in Queensland and Western Australia, and certainly Victoria, Premiers, it seemed to me ceded a great deal of authority to unelected chief medical officers, who determined what a government could and couldn’t do, and should and shouldn’t do, and certainly what the population should and should not do. And I felt that it in the course of managing an understandably complex public health situation. Nonetheless, politicians were ceding too much authority to experts, and that when politicians do this, they pose a threat to the liberal democratic society in in which we live, because we elect politicians to do a job, we elect politicians on the basis of policies they undertake to implement. And we look to politicians to regulate the kind of society in which we live. But they are accountable, because if we don’t like what they do, we can we can turf them out at the next election. And we can turf out individual members of parliament at by-elections. But when we have unelected unaccountable experts, such as chief medical officers dictating what can happen in any society, I think that it poses a great danger to us. And we saw the impact of this because there were social consequences. There were economic consequences. And there were cultural consequences as well. And I’m thinking when I talk about that I’m thinking about the impact on families of not being able to travel for funerals, not being able to visit people who are sick or terminally ill. And I think that the standard that chief medical officers set which was you know, keep everybody safe, and that there must be no risk of any contamination or, or contagion whatsoever, meant that the additional costs, the consequences that are borne or have to be borne from those decisions, were not taken into account. And that was really what made me start to think about the problem of experts. I mean, we need experts. They are an integral part of a, of a technologically complex society. I don’t say we don’t need them, but we need to hold them to account and we need to make sure that elected representatives, politicians who are appointed by us to do a job actually do do their job.
Gene Tunny 05:09
So would you say that the, to an extent these experts were ruling over the rest of us during that COVID period, is that, that’s the argument you’re making there Peter?
Peter Kurti 05:18
In Covid yes, I think they were. And I think that there are a number of reasons why that happened. One was that it was a once in a century, once in 100 year, public health emergency, and no politician really knew what to do. Nobody really knew what was coming. And there was a lot of anxiety and a lot of fear amongst the population at large. And politicians clearly had a responsibility to not just to set an example, I think, but to reassure uneasy populations, and one of the ways to do that is to cite medical advice, scientific advice. And the it to an extent, we all looked to chief medical officers to tell us, first of all, what is happening, and then tell us what’s going to happen next. And so as I said, a moment ago, it was a very understandable set of circumstances, but I don’t think it justifies or excuse, it justifies but it doesn’t excuse what happened. And I think that we must always be sure, should such a pandemic ever occur again, that public health advice is just one part of the body of information, one part of the body of opinion that is taken into account.
Gene Tunny 06:38
Yeah, yeah, I agree. Yeah. This is something I’ve covered on this show before and I had concerns about is there’s a point you’re making the paper about how there are, there are trade offs involved, and you need politicians to make those judgments. And there’s no real technocratic answer or no real. I mean, is that one of the arguments you’re making is I mean, the the idea of having an expert in charge or, or their view, almost prevailing all the time, the problem there is that that’s a technocratic answer. It assumes that there’s always a technocratic answer. Is that a fair reading?
Peter Kurti 07:17
I think that’s right. So Gene, and one of the reasons I think we got ourselves into this situation during the pandemic was the politicians didn’t really know what to do, because it was such an unexpected and unanticipated set of circumstances. And I think that they were, you know I’m speaking about in very general terms about a large group of people with different political affiliations. But on the whole, I think, political leaders did not want to be caught out, they did not want to be sort of caught out by the media, who might then say, if if things get worse that to say, well, you know, if you’d taken that advice, this wouldn’t have happened. How do you account for that? And so I think we have an increasingly risk-averse group of politicians who will just as it were hide behind or rely upon or depend upon that sort of expertise in order to, in a sense, make life easier for them. But we need that sort of, I mean, in a sense, we can’t, we cannot avoid engaging with experts. And we cannot avoid engaging with people who have expertise in public health when it comes to managing health issues such as the pandemic. But if we don’t hold people to account, if we just allow experts to make decisions for us, without regard for the broader set of consequences, those trade offs that you mentioned, then I think we’re in trouble. And we saw that we saw that in every state, and territory. But we certainly saw that here in New South Wales, where areas were locked down. So that there was an area in in in Sydney, from which a lot of tradies needed to travel in order to work, when they can’t travel, they can’t work when they can’t work, they can’t earn money. And well, I mean, we know what the economic consequences of and the social consequences of that are. And I think simply to say, you must stay home and stay safe is not enough, because everyday life is full of risks. And we take risks and assume risks and make calculations about risk every day.
Gene Tunny 09:26
Yeah. What area was that? Peter? Was that from Western Sydney? Fairfield? Fairfield. Gotcha. Okay. Was there also a an issue of the composition or the demographic makeup of that area that that suggested that I mean, this was almost discriminatory in a way because I know that some areas which had higher ethnic populations, they ended up being suffering worse restrictions, didn’t they? And that can lead to social tension.
Peter Kurti 09:54
That’s right. And that is exactly what happened because they found, I mean, the police were very, in my view, were very heavy-handed during a lot of this time, and then the police or others found that in communities with large, the large ethnic component, people were not being as observant about the restrictions because, for example, in, in Muslim communities, there are larger families and getting together and mixing with one another is is very important. And they attracted, I think, the particular attention of the authorities because of this. And so the lockdowns and restrictions were more stringent. Again, you know, judging everybody by one standard, everybody must stay safe. Everyone must stay home, regardless of whether or not that’s something that’s practical or even necessary.
Gene Tunny 10:51
Hmm, yeah, exactly. You talk about this concept of double delegation. So I’d be grateful if you could explain that and also reflect on is this something that we’re increasingly seeing these chief medical officers, they’ve been introduced in the last couple of decades? I mean, we didn’t have a Chief Health Officer in Queensland, I don’t think until the early 2000s, we had a public health act in 2005 that came in, and this this new position they’ve created, and they delegate some powers to that position. And presumably there are other examples of this, is this something that’s becoming more common. Is this something you’re concerned about the trend? Could you talk about that, please, Peter?
Peter Kurti 11:36
It is part of a larger trend. It was COVID that alerted me to the problem and brought it into focus. And I suppose maybe I have simply been complacent before because we are used to experts, advising government and all kinds of things. We just think, Oh, well, that’s the way the world works. But not in my lifetime have I seen what kind of impact this expert advice had? But I think it is part of a broader trend. And we see it in other areas. I’ll say something just about double delegation before I come back to that to that manifestations of that broader trend. It’s a phrase I picked up from the English political scientist, Adrian Pabst who talks about the the fact that he describes this problem that arises when we as it were delegate to elected politicians, we delegate to them, we say we appoint you to do a certain job for a certain amount of time, we will assess you. I know this is not necessarily what we actually think. But we say we will assess you at the next election and decide whether you’re going to keep the job. Those to whom we delegate, delegate in turn to, to this body of experts, and Pabst describes it like this. He says, double delegation arises when representatives elected by citizens delegate power to unelected officials, who are part of a professional political class. So it’s not just a matter of delegation, but delegation to a professionalised group of people who, who are then use their professionalised status to further entrench their position. And to argue that what they say not only is right but needs to be observed. Now, we’ve seen in public health that was the most obvious example but I think we also see it when, when there are discussions, for example, about energy, about climate and changes in in the climate. We do see it a lot in economics, although I think that’s to an extent a rather specialised example, because economics is so is so technical. Certainly monetary theory is very technical. But we hear these phrases that are put about when there are discussions about climate change, like the science is settled, for example, which I think is a contradiction in terms because I don’t think science is settled. But a group of professionalised climate scientists decided that this is this is the position we need to adopt. And they’re backed up by the media, who emphasise their opinions and so consolidate their position. So it’s part of a broader trend. And I think we’re going to see more of this, I think with when areas that really, so few of us actually do understand such as AI and the emergence of AI and development of AI. We need to be really vigilant about the way in which we use expert advice. The paper is not I’m not anti experts. I’m not saying we don’t need experts, we can we can make our own decisions any more than I’d say we don’t need we don’t need surgeons. I’ll do my own surgery. Thank you very much. Well, I’m not saying that. What I’m saying is that if we are going to use experts as we are bound to do, we as citizens of a liberal democracy in Australia, need to be thoughtful about the way in which we engage them in ways in which we hold them to account. And we also need to be stronger about defending freedom of speech in the sense that I think we need to be more willing to tolerate dissent, we need to be able to say, well, this group of scientists over here says, you know, there is a climate catastrophe, for example, whereas this group of scientists over here is saying, well, warming and cooling is just part of a trend. These are parts of tre.., these are trends that that take place in on the earth over a period of years. We need to be able to tolerate dissenting views. I’m not saying we are necessarily able to determine which view is correct. But we are increasingly reluctant I feel to tolerate it today. We’re reluctant to tolerate dissenting views, because we want to have the right answer. We want to know what the right position is the right solution is. We saw that during COVID. Of course, when debates about the efficacy of vaccine mandates or mask mandates, or social distancing, dissent was not tolerated. And I think that if we are going to make an intelligent use of experts, we do need to be willing to tolerate dissent and to live with perhaps the discomfort that comes from having dissenting views.
Gene Tunny 16:24
Yes, yes, exactly. Yeah. It makes it difficult for politicians, though, if, if the experts don’t agree, so how, how do we think about that? Or what’s the relationship I mean you mentioned tolerating dissent, that’s one of your rules or your tips for getting experts, like using them effectively? I mean, there’s obviously a role for expertise and people who understand the issues, and they provide the advice to the government of the day. How do you think about how those experts should be used? And I mean, what do decision-makers do when there is a situation of of that of that dissent I mean, is it up to them to judge where the weight of evidence is? I mean, because the politicians will say, Well, look, the bulk of evidence is in favour of this hypothesis. It could be climate change, for instance. So yeah, how do you think about that, Peter, how should politicians use experts?
Peter Kurti 17:21
Well, I think it really just the way that you have outlined by examining what it is the experts are saying, By assessing the evidence, by determining where the bulk of opinion lies, and then using judgement and skill to make a decision. We can apply that sort of framework to any policy area where might think about migration, levels of migration, there are people experts who say Australia, we can’t have a big Australia, others say we can have a big Australia, and each side will mount will present evidence to bolster their own arguments. And I’m sure believe, quite passionately, the evidence that the cogency of the evidence they present, but somebody then has to make a decision about how we do that, and an elected government has to take a position, we can see it in terms of going to war, or whether we supply arms, for example, to Ukraine, we went into Iraq 20 years ago, very controversially, but we did so on the bai., I mean, at the Howard Government did so on the basis of evidence that was presented. And as we remember, because we know those around at the time, there was a huge amount of dissent in this country about that. At the end of the day, it’s elected representatives who have to make the call and are then held accountable. So I think it’s it’s a difficult role. And I’ve never been an elected politician. So I’ve never been in the position of having to implement this. I’m simply really someone on the sidelines who’s advocating for a certain as it were, a certain style of, of a certain style of living, if you like. But I think it’s by by weighing and assessing, carefully, evidence that is presented. And I think not allowing fear, I talked about the importance of political courage, not allowing fear of adverse consequences to deter somebody to deter you from making the right decision, for example. When I mean, how many years ago was it now it’s it’s must be nearly 30 years since the Port Arthur tragedy. And the Howard Government decided that they were going to take a stand on on firearms. And there’s a lot of controversy about that at the time. I remember not being in Australia very long. And the view was that people living in the country or people who are really attached to their weaponry wouldn’t be happy with this. And there were arguments on both sides, but I think the weight of public opinion, or rather, I should say this put it this way. I think the Howard Government made it made a decision based on on the evidence and the politics, and also having to judge which way public opinion whether public opinion would accept this. And it was a controversial decision. But I think, given the horror of what happened at Port Arthur, the Australian public did accept it. But there was no telling, which was the right what was the right decision or not? I think it’s in a sense, you only know whether you’ve made the right decision with hindsight.
Gene Tunny 20:33
Yeah. What really annoyed me during that COVID period was the politicians making decisions and saying, the science tells us this, we have to do this, this is the only the only thing we can do and, and not going into what the decision making process was or they didn’t show that they were weighing up pros and cons, whereas they really should have because there are going to be pros and cons of any decision. There are the trade offs we talk about, there was no right answer in necessarily, in my view, it’s always a judgement call to an extent when we’re we’re dealing with those trade offs. And what made that clear to me and to others, and this is something I was chatting with one of my colleagues, Joe Brannigan about on this, this show when it happened, we had a Chief Health Officer who I don’t know if you remember, they let Tom Hanks in, you know, if you’re a movie star, you’re a footballer, you you had no problem getting into Queensland. But if you were just some regular, you know, person and yeah, bad luck, you got to do two weeks quarantine. And then we had a constraint on the number of hotels for quarantine. So that meant people were camping on the border. It was just disgraceful. So that that’s one thing that annoyed me that I think there was too much relying on the experts saying this is what the experts have told us that it’s based on science. And there’s no acknowledgement that they’ve actually, you know, there’s really a call that’s been made there, or there should be a call, there should be a judgement that the politician should be involved in. I think that makes sense. Does that make sense? What I was just saying?
Peter Kurti 22:16
Yes it does! And the trouble is that the politicians just caved in. I think there was a I mean, there were these sorts of stories all around the country. But there was that famous incident where a mother I think living in Tweed Heads needed to get her very sick child or children to a hospital. The nearest was in Queensland, but it’s qui… You can edit this bit out Tweed Heads, Tweed Heads in New South Wales isn’t it?. Yeah. She needed to get across the border. And Palaszczuk said famously, or notoriously that Queensland hospitals are for Queenslanders? Well, I thought, you know, I mean, it was a disgraceful thing to say, because I felt what was also happening in this time of panic was that our national identity was fragmenting and we were becoming a sort of a collection of fragmented colonies, and I would d.., former colonies, and I thought that even our sense of national cohesiveness has, has has gone. All kinds of stories, like I’ve had people who weren’t able to visit sick, sick relatives in hospital, because there was this fear of contagion. And I think, and politicians just seem to be happy to let that happen. In New South Wales, interestingly enough, when Berejiklian left, left the job of Premier and Dominic Perrottet came into office, the first thing he did was reduce the period of isolation that you had to have if you tested positive from seven days to five days. And there was the usual concern expressed by public health experts that actually this you know, you could still be contagious after five days and, and, you know, this is really not a good decision to make, but Perrottet had the wisdom to see that, in fact, people needed to get back to work and they need to get on with our lives. And that five days was enough. And that you just had then have to assume a degree of risk and in in what you do next, and we all of us, you know, we exposed to the flu virus every year. We know that if we’re sick, we stay home if we’re not if we if we feel really unwell we go to bed, and I think for the state to say and saying to people who are actually very well but happened to have tested positive on a on a on a rat rapid antigen test, which in itself was not 100% reliable, meant that people were exposed or subjected to all kinds of inconvenience. So I think there were lots of examples such as such as the ones that you cite, and and the ones that I’ve cited,
Gene Tunny 24:55
And just on Tweed Heads, so just to provide some context. So it’s part the same urban area as the Gold Coast effectively. I mean, if you if you drove through there, you wouldn’t, unless you saw the sign, you wouldn’t realise you were crossing from Queensland to New South Wales. So it’s, and that was the that was part of the problem. And then they had to put the barricades up and have the police there. It was just just awful situation. So I should ask Peter about the those tips for dealing with experts. You mentioned them before, I just want to go over them again. Because I think this is really good I think this is one of the best things you do in this paper, you’ve got these three cultural contours. There are three of them that if cultivated and emphasised can underpin the approach to engage in experts and help encourage an efficient and responsible contribution to democratic decision making and one tolerance of dissent. Absolutely. Political courage. So the elected representatives need to be less anxious about upsetting public and political opinion in determining the policy trade offs. I think that’s great. I think what would have worked, now it sounds like I’m picking on the politicians or politicians during the pandemic, but of course, it’s it’s one of those, you know, it’s an example. It’s one of the, you know, it’s one of those crisis periods where you really, these issues come to the fore. So, look, I understand the human, I don’t want to be super negative about them. But they really did provide this, this example for us to talk about. So I will talk about it again that say, you know, what would have been better is if say, our Premier had said, okay, look, yeah, this is what the Chief Health Officer advised. I’ve weighed this up, I’ve recognised the fact that this is going to cost the economy, but this is the judgement I make, which you should the politicians should have be more honest about that is that that’s what you’re getting at there?
Peter Kurti 26:45
Well, yes. And I think, not being frightened of making a decision. Lest it turn out to be the wrong one. I felt they played it safe all, all the time. And so I think that’s right. We saw it with the vaccine mandates that I mean, we were, for example, we knew that the vaccine wouldn’t stop you necessarily stop you getting COVID. But it would alleviate the symptoms, you would have it less badly. But it didn’t, if I’m vaccinated, it doesn’t stop me from infecting you. It just something that affects me and yet we had in New South Wales and around the country, these vaccine mandates, and it got ridiculous, you couldn’t go in, you couldn’t go into shops, you couldn’t go into these unless you prove that you’ve been vaccinated, whereas vaccination really did not affect, my vaccine status did not affect you or any other of my neighbours. And yet nonetheless, we were required to do this, and the hurriedly developed vaccines were presented to the Australian population as being safe. And we know that they were not entirely safe as I mean, no vaccine is because science, to an extent, is an art. I mean, it’s a science, but it’s also it’s an art and we don’t, we can’t always be sure of an outcome. And certainly, I think with things like vaccination, especially when they’re rapidly developed, there will be there will be difficult, and there’ll be problems. But anyone who raised those sorts of problems would announced those who expressed concern about about the safety of vaccines, vaccines were, were denounced as being irresponsible. And it seemed to me that no politician was prepared to say, we don’t need to do. We don’t need to do things in exactly this way. We need to be calmer, we need to be more realistic about about the nature of disease, we panicked. I mean, Western Australia shut down the entire state, when there was one case, yet we seem to be blithely indifferent to the 1000s of people who die every year of flu. And I felt there again, you know, the politicians were just caught up in this pandemic panic. And I think that a degree of political courage, would’ve allowed them to say, It’s okay, you know, we have sickness we have people do get sick, but life has to go on. And we need to make we need to be responsible and take decisions in a way that minimises the harm that we expose others to, but that allows us to continue with the lives that we’re living. And the the incomes that we’re earning. So yes, I think it’s, it’s that sort of response that I would like to see cultivated by when that I’m really scribing in terms of political courage.
Gene Tunny 29:45
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Gene Tunny 30:20
Now back to the show.
Okay, very good. So we talked about tolerance of dissent, political courage, and the final cultural contour is institutional integrity. Yes, exactly. Yes. So, “No democracy today can dispense with experts, but institutional mechanisms of accountability can ensure that experts exercise autonomy, responsibly” Could, what, what mechanisms do you mean there Peter?
Peter Kurti 30:49
I think? Well, I cite a number of examples. One is the oversight of budgets that are available to experts, the appointment of experts to advisory panels and boards, the codes of conduct that guide the behaviour of of experts, codes of ethics, just, you know, various sort of social and institutional frameworks that we put in place to ensure that people know, experts know that they have to be accountable and cannot simply claim their expertise as a warrant for doing whatever it is they want. You know, it’s a slightly nebulous idea, because it’s not it’s not something it’s not like a switch that can be can be flicked. And suddenly we have institutional integrity. I think that is a that’s why I call them these three points I call cultural contours, because cultural culture evolves and a cultural contour is something that has to be cultivated. And in a sense, practised as well. Another form of institutional integrity might be the very fact that we can question experts and say, but, you know, you’re wrong. Going back to the pandemic, it was simply not acceptable to say that Sweden had got it right and Australia got it wrong. I remember doctor as a doctor friend saying to me that ivermectin was, which, which in his medical experience was something that had that had the capacity to alleviate COVID symptoms, could now no longer be prescribed off label. And he was very indignant about that, because he felt doctors always have a discretion about prescribing medicines. And that whilst the medication can be prescribed for a specific condition, that it states on label, it might also have an effect on conditions not specified hence the description off label but they were actually prevented from prescribing off label. Well, I think we need to also why is this why but even to utter the word, ivermectin would get you disconnected from, you know, various groups and various fora. So that’s another form of another manifestation of institutional integrity that we can actually, we can have systems in place that are robust enough to ensure that people are held to account and are not free to make those sorts of decisions without without regard for the wider consequences.
Gene Tunny 33:18
Yeah, exactly. I mean, to me, so they’re getting some scrutiny. I mean, there is some media scrutiny, arguably not enough, there was not enough probing, there weren’t enough probing questions during the pandemic of the politicians and the officials and the chief health officers, they should subject themselves to more media interviews. And part of the problem is the normal processes of government were suspended, weren’t they during the COVID period, because we had these public health acts that gave them these emergency powers. So there wasn’t the usual debate in the parliament or the you know, the committee processes where there’s something serious, you know, something of such magnitude or such, such great impact on the economy and society would be debated for, I don’t know I mean should be extensively debated in parliament in committees, and it just wasn’t. So that’s that was what I see as one of the problems too.
Peter Kurti 34:18
I agree, I agree.
Gene Tunny 34:20
Yeah. Okay. Very good. So that’s one thing I really liked about that paper. And I’m going to put a link in the show notes because I think it’s Yeah, I think that’s great. Okay, AI, you mentioned AI, what are you concerned about there? Exactly. If the experts are formulating the response, what are you actually concerned about there?
Peter Kurti 34:37
Oh, no, I think we need we will need to be very attentive to expert advice when it comes to AI because it’s, it seems to me from my layman’s perspective as a non computer expert, that it seems to me that experts themselves are debating about the capacity of AI and these large language models and generative AI to assume increasingly demanding roles. And this is a long standing issue in, in areas like philosophy of mind, and certainly in cognitive science about what consciousness is and whether a machine can be conscious. And we don’t know. And I don’t think the experts know. And there are some AI some some experts who are calling for us to slow down and take things more steadily, others who are quite happy to let the horse out of the stable, well it’s out of the stable but let the horse gallop at whatever speed it wants. So I think that that’s an example of an area where we clearly are going to have to depend upon experts. And it will be foolish not to, but at the same time, we need to, we need to accept that there will be dissent within expert groups. And we need to be comfortable with that dissent, with that dissent, and we need to, in a sense, not abdicate responsibility for my for making our own decisions about these things to experts, and to to attend as best we can, to what experts are saying and to think critically, about how we ourselves respond to what they’re saying. I think AI is very exciting. And I think it’s it’s whether it’s in, in in medicine, or space exploration or, or defence, AI is rapidly changing the way we we interact with technology, but we don’t quite know how it’s going to go. And I think we need to be, as I said, we need to be attentive to what experts are actually saying and to follow the debate, you know, not to give all the authority and all the power away.
Gene Tunny 36:47
Yeah, gotcha. One of the conclusions you reach, you note that this report has argued that any economic account of experts, which takes into consideration the tenants of public choice theory. So that’s something I’ve covered on the show before, I’ll put a link in the show notes to that episode. So any economic account must always allow for the influence of personal interest, opinions and prejudices of those providing expert advice. So do you see that that has been? That has been a serious problem? Do you have any examples of that Peter, are there any examples that come to mind?
Peter Kurti 37:26
I know we’ve talked a lot about COVID in our conversation, but I think COVID provides a good example of that. This notion of information choice theory is an idea I discovered with the writings of Roger Koppl, who of course, develops as you’ve mentioned, public choice theory, but really, information choice theory. Koppl is arguing that perverse outcomes can occur when expert advice is is tended that experts themselves will be motivated by self interest. And he would say that what we have to do is abandon the idea that experts seek only the truth without regard to motives such as fame and fortune. And that sounds a bit cynical in some ways, but I think Koppl is is right that we can’t, we must imagine that experts themselves have got are devoid of human motivation or ambition or desire, and accepting that that’s just the case that is human nature, that Koppl argues that information choice theory suggests that what we need to do is have is to avoid situations where one body of experts has a monopoly over opinion, but they must be able to compete with one another, an example that he cites, and I’m not sure it applies in quite the same way in Australia, but one of the examples he cites is forensic medicine. And he argues that, that when there is no competition about forensic scientists, amongst forensic scientists, and forensic medicine is devoid of those the competing voices of experts, there’s a danger of, of scientific error, which of course, being forensic medicine can in turn lead to instances of injustice, and that where there is more than one forensic medical point of view, the there is a greater chance that error will be avoided and therefore injustice avoided. Now it does happen to an extent here we know in each state and territory of this country, forensic medicine has led to injust, miscarriages of justice, which are then which are then corrected. The problem in the United States is that the death penalty is is reasonably widespread, and that although that can take many years, faulty forensic medicine, forensic research can lead to, you know, very draconian punishments. We don’t have that quite that problem here. But it’s an example that Koppl cites and I think it’s a it’s an interesting one that we would do well to attend to.
Gene Tunny 40:02
Okay, I’ll have to look up his work. I wasn’t, I’m not familiar with Koppl. Did you, was he in the public choice school?
Peter Kurti 40:09
No, he is, it’s Roger Koppl he’s actually it’s finance and financial management. He teaches, he teaches, I’ve not got the book right beside me.
Gene Tunny 40:21
That’s okay. I’ll put it in the show notes. Is he at Syracuse in, in the States?
Peter Kurti 40:26
Yes I think he is, I think he is. And the book that he wrote a really interesting book was Expert Failure, a book published in 2018.
Gene Tunny 40:35
Yeah, I’ll definitely look into that sounds. Sounds interesting. Okay. Before we wrap up, I just want to ask you again about? Well, I want to ask about monetary policy, because you mentioned this is one area where and this is a case study you give in your paper, this is one area where delegation can be justified. Now, could you explain why that is? Peter, why we would delegate the monetary policy decision. So changing the cash rate in Australia, changing the federal funds rate, why we would delegate that to either the Reserve Bank of Australia board or the Board of Governors of the Federal Reserve Bank?
Peter Kurti 41:13
Well, it’s an interesting example. And I think, in a way, it’s a timely example, because the, and again this really flowed out of the way in which the Reserve Bank was considered to have performed in the wake of COVID, not raising interest rates fast enough, not getting on top of the not, not, tapping, trapping that inflationary genie in the bottle promptly enough. And so there was a review. And there was a feeling one of the recommendations in the review was that there should be this, this monetary check, what’s it called a monetary? That’s right, the Monetary Policy Committee, Monetary Policy Board that’s it, that there should be a separate board that will advise the Reserve Bank board about what to do. And there’s this view that, in fact, a view put forward by Peter here, that the the Reserve Bank, governors are well, meaning amateurs, and that’s possibly true. Not all of them are, but they’re engaged in business and corporate and economic life in the country, given that the Reserve Bank has a target band of inflation, and there are ways of meeting that target. And the board has to make a decision about interest rates in order to try to meet that inflationary target. It involves some very difficult some very technical decisions that are really beyond the capacity of ordinary members of the public. So I think I use as that as an example of an instance where we do need experts. But we mustn’t abdicate all responsibility, and that they need to be held to account in in some ways, and I think some it or the way the monetary policy board was promoted in the review. And the way it’s been greeted in the press, by some people, is that this body of experts will now correct and avoid all the failings of the Reserve Bank. And I think that’s a problem. I think that we need that sort of advice. But there were commentators like John Edwards was one of them, who wrote in the Australian saying that actually, the Reserve Bank didn’t do such a bad job when you consider other central banks around the world in western democracies, that the Reserve Bank board didn’t do such a bad job. And I think there’s this idea that now we’ve got the experts, everything will just be fine. And we won’t have those mistakes again. And I cite it as an example, because I think it’s an area where we do need experts, we do need people who are proficient in the complex technicality of monetary monetary policy. But in the sense it’s an instance of that might be an example of information choice theory where you need to account for the fact that even these experts with these technocratic experts, even these people have, have human failings, desires, ambitions, and goals. We cannot think that somehow there is this pure, disinterested advice. That’s been that’s been tendered. And I cite the Reserve Bank. And the other example I cite is ICAC The Independent Commission Against Corruption, because it shows actually how in a sense how complex modern life in a country like Australia is, and that there’s no rule. You can’t say, well, we need experts in these situations but not in those situations. We need experts in in different ways for differing rules, but we have to think about how we use them. So if we have a monetary policy board, is this board a board that is going to be accountable? To who? The treasurer, perhaps, the board? Probably not, it’s independent, who appoints them, and how, for how long are they appointed? and how they removed? Those are the sorts of questions that I think we need to ask about such a board. And that’ll be an example of the kind of institutional integrity that I’m talking about. Where we think about, what are the parameters of control? What are the terms of office? How are the people appointed, how they removed? What are the criteria that are used to make those appointments? And you may feel at the end? Well, that’s all a bit fuzzy. And I suppose in a sense, it is fuzzy. We these are, there is nothing, there are no hard and fast rules about how we approach these questions. I don’t think that means the questions are unimportant, nor do I think it means we should avoid asking them.
Gene Tunny 45:40
Yeah. So that Peter, the other Peter, you mentioned is Peter Tulip, Chief Economist at Centre for Independent Studies, and Peter’s argued that there should be a separate monetary policy board separate from the the bank board with that could run the Reserve Bank. And yeah, look, there are some there are arguments in favour of it. I don’t know whether it’ll actually mean we get better decisions. It might. Because the the current board does have the, it’s got some RBA members on it. It’s got the Treasury Secretary, and then it’s got, you know, it’s getting all the advice from the Reserve Bank. So maybe we could get better decisions. I don’t know. I’d be willing to have the experiment, it’s possibly worth doing the experiment. But one of the things I would point out too or one thing I should note is that, you know, there is a delegation already to the board from the government. I mean, the government, the Treasurer doesn’t make the interest rate decision that is delegated to the Reserve Bank board and economists have generally, you know, most they all sort of agree that that’s a great thing, because, well, monetary policy is a technical decision, we want to keep the politicians as far away as that away from it as possible, because their political interests could be in favour of inflation, getting some short term, you know, giving the economy a short term boost prior to the election, accepting some inflation that comes later, because they want to get elected so that there’s a risk there. So that’s why that’s been delegated. And then what Peter’s arguing for as well, we should then go even further than that, and have a or have a special Monetary Policy Committee with expert economists on it. So you know, really increase the expertise of the body that’s making that interest rate decision here in Australia. Yeah.
Peter Kurti 47:37
And I should say that Peter was kind enough to read that section of the report and gave some helpful feedback. And it was I incorporated a number of his comments in that section. So that I, he corrected any sort of that I was drifting at one point. I mean, I’m not an economist, and I was grateful to Peter for so he’s read this. And he knows what I’m, what I’m saying.
Gene Tunny 48:00
Very good. Okay. And, yeah, I guess the point is that we’re delegating the the technocratic decision on the exact interest rate at a particular in a particular month. But the government does still decide what the target is it decides what the it reaches an agreement with the Reserve Bank on the conduct of monetary policy. So they’re not, they’re not completely abrogating or dodging responsibility for it. They are, they are still accountable. The government is involved in it, but they’re not making the technocratic decision on the interest rate, which could be problematic if they were involved in that. Because for that reason that I mentioned that the you could end up with really bad policy and evidence from the 80s. From before the 80s. It was, the evidence came, I think it was Alesina or in the 90s, late 80s, who showed that central banks that are more independent, that don’t have that the government telling them what they should be doing with monetary policy. Those countries ended up with better inflation outcomes, so lower inflation. So that’s, that’s why it’s good to delegate that decision too.
Peter Kurti 49:17
And I agree with you, I remember when the the the Blair government was elected in 97. Very soon after the tre.., the chancellor, the Treasurer, Gordon Brown, declared the independence of the Bank of England, that had needed to happen long ago. And I mean, Australia had got an independent bank had already got an independent central bank. And I think that that’s very important because we can imagine that for example, if the Anthony Albanese decides to go for a double dissolution, we’re talking now on the last day of July, but if he decides to go for a double dissolution, he’s not going to want to run on on on on his economic policy at the moment because Australians are very cheesed off with the way things are going and so it’d be very tempting for a government to tweak interest rates with if they’ve got their eye on an election. So I think having, it depends it’s very important. And why I cite the example is because I think it’s an it shows the complexity of the relationship between experts and their elected overseers and how that relationship, how is managed, how they are held accountable, and how we decide to what extent they are, they enjoy autonomy and to what extent they need to be to be reined in. There’s a phrase that is used by one of the writers that I quote on this, because there’s a lot of literature about expertise, which was, so it’s a very interesting paper to research and write. He talks, Michael Schudson talks about, we need to work out the length of the leash on which we keep experts, it can’t be too short, otherwise they won’t be able to do their job, but it can’t be too long, otherwise, we won’t, you know, they’ll they’ll just make decisions without any kind of accountability at all. They have to be autonomous, but not too autonomous. How do we calculate the length of that lease? It’s a very difficult thing to do. But I think that I am completely in favour of an independent central bank. And I certainly wouldn’t want this paper to be interpreted by some as advocating for a return to government control.
Gene Tunny 51:20
Oh, no, no, no, not at all. I read that section, I thought Oh, yep. That’s That’s right. And the one thing I would have added into it was that point about how having that delegation of the actual choice of the policy rate that’s, that’s good from the point of view that that independence does lead to better or lower inflation outcomes. So that’s something that’s been widely researched and, and proven so very good. Okay. Peter Kurti. Thanks so much. It’s been great. And I agree, we need to think more about the role of experts and how they’re used in policymaking. It’s important if we have another pandemic, let’s hope not, but also in decision making and all the other great challenges that we face, challenges relating to climate change challenges related to AI. So it’s important to think about the role of experts in advising government and we want we want to avoid the experts taking over, we need governments to be weighing up the the advice thinking about it, you had that the great, the trilogy of of tips, which was good, the, you know, being courageous and tolerating dissent and what was it, thinking about, was it accountability?
Peter Kurti 52:37
Institutional integrity I’ve called it.
Gene Tunny 52:40
Institutional integrity. Very good. That’s great. Peter Kurti thanks so much for your time. I’ve really enjoyed it.
Peter Kurti 52:47
Thank you, Gene. It’s been a real pleasure. I’ve really enjoyed our conversation
Gene Tunny 52:53
Righto, thanks for listening to this episode of Economics Explored. If you have any questions, comments or suggestions, please get in touch. I’d love to hear from you. You can send me an email via contact@economicsexplored.com or a voicemail via SpeakPipe. You can find the link in the show notes. If you’ve enjoyed the show, I’d be grateful if you could tell anyone you think would be interested about it. Word of mouth is one of the main ways that people learn about the show. Finally, if your podcasting app lets you then please write a review and leave a rating. Thanks for listening. I hope you can join me again next week.
53:40
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Credits
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