Public Policy and Thinktanks

Panel Presentation for Public Intellectuals Seminar, Friday 26 September. A later panel was The New Intellectuals?

To begin, as is appropriate, with a dissent from the conventional wisdom. The notion of ‘Public Intellectuals’ seems to me to be unhelpful, because it focusses on individuals, and is likely to generate jealous spats of just who is or who is not one. It is the public intellectual discourse which we should focus on, the process by which intellectual activity is applied to questions of public policy in its widest sense.

We have just had a panel on universities. In my areas of public policy – economics and public policy in the narrower sense – it is unquestionable that their role has substantially diminished over the last three decades. With a few exceptions, today the news media rarely consults university economists on public questions, instead going to financial market representatives. Few academic economists get involved in public debate on a sustained basis, a situation which cannot be explained only by the media’s actions in the early 1990s to cut out a number of dissenters. When there is a desperate need for a thoughtful contribution for an urgent public issue – the foreshore debate would be a current example – academics are silent, although that is partly because their rhythms are somewhat slower than the way these disputes move. There is considerable contempt among public sector economists over the contribution of their academic brethren, not least because some of the public interventions have been poor quality and uninformed but, more importantly, because the majority of the academics are not researching and teaching in areas relevant to the issues of the day – or of the future, as far can be judged.

Not that the off-campus public intellectual discourse can be that comfortable over its standards. It has always puzzled me why the academy has not demanded higher quality. It has either failed to comment, or joined in at a level which, sadly, has contributed to a further lowering of standards.

So compared to thirty years ago, public discourse has moved off-campus. But to where? There are very few ‘think tanks’ if we use the term properly. Treasury’s Economics II in the early 1980s was one, partly because the political process loss control of the public servants. A government unit generating ideas subversive to the political order is not likely to happen again. Today’s similar inside-government units cling to the conventional wisdom, often adopting as new what was on the frontier a decade and more earlier. For example in the early 1990s I first wrote about the divergence between Australia and New Zealand economic performance after 1985, an academic picked this up in 1998, the NZIER first mentioned it in 2000, and the Treasury in 2002. In each case the publisher of the rediscovery did not cite the predecessors. One of the most characteristic features of the public intellectual process in New Zealand is the elementary failure to cite – and probably to read – earlier contributions.

Outside government the most successful thinktank in the terms of promotion of ideas which turned into policy has been the Business Roundtable, although the quality of its publications has been disappointing. That it was so readily accepted is an indictment on the public sector: that it was rarely challenged is an indictment on the academy. The NZ Institute of Economic Research was an important thinktank, but its discretionary income was eliminated in the 1980s and today it is a consultancy. If you want to see interesting quality economic research, look to the Motu Research Group,, where a number of independent scholars are cleverly exploit public research funding. They offered a fifth of all the papers at the last conference of the New Zealand Economist’s Association. But their intellectual freedom is largely proscribed by the funding.

That illustrates why there has been a reduction in public intellectual activity in areas associated with public policy in the narrower sense. The reforms reduced the niches in which genuine public intellectual activity could occur. I have already mentioned the self-imposed media censorship. There are very few New Zealand fora when one can partake in rigorous and vigorous intellectual debate. Moreover, as government funding became tighter it also became more controlling. It was fascinating how the universities accepted reforms which provoked the duty of them being critics and conscience of society but, like the porter in Macbeth, took away the performance.

With one exception, private funding never filled the void. But the well funded Business Roundtable has little independence, for while it claimed to speak in the public interest it stuck ruthlessly to the interest of the businesses it represented, including not exploring issues – such as protection – where there were conflicting interests among its members, and attacking businesses who were not members.

One can not help contrasting the generosity of the private sector, including individuals, to supporting artists to pursue their vocation, with its miserliness towards public intellectuals. That reflects, I think, a lack of faith of the nation in intellectual activity. Ours is a world of practical men and women unaware of their dependence on intellectuals for so-called commonsense and fashionable ideas – albeit typically defunct intellectuals.

Does it matter? Twenty years ago New Zealand adopted a new course of economic policy, the critics of which were unsupported, marginalised, and repressed, while the advocates were rewarded, promoted and feted. The outcome of those reforms was stagnation. Had the New Zealand economy grown at the same rate as the Australian economy, its GDP would be between 10 and 15 percent higher. Had the critics been listened to, we could have adopted the sober Australian version of the reforms rather than the drunken Rogernomics Not only would our incomes be higher, but New Zealand would still be in the top half of the OECD on the GDP per cap measure, a conclusion all the more ironic for that target being promoted by those who largely supported the misconceived reforms of the 1980s and who want to repeat them.

In other words, the poor public intellectual discourse which bedevils New Zealand, has probably cost the country over $10 billion this year, and every year for almost two decades. And there are anti-intellectuals who want to repeat the failure. It makes you think.