Friday, December 09, 2005
As the famous jingle goes:
There was a dachshund once so long
It hadn’t any notion
How long it took to notify
Its tail of its emotions.
And so it happened while its eyes
Were filled with woe and sadness
Its little tail went wagging on
Because of previous gladness.
That is the story of centralism, detailed national targets, rigid state (and indeed big private corporation) plans and all one-size-fits-all notions whether of the traditional Left or the traditional Right. Liberals recognise that we need enterprises and organisations capable of responding quickly and accurately to real needs – and above all capable of recognising each of us as individuals not as components to be manipulated.
The Extra Cow brings us to the tragedy of the commons. (and I don’t mean Parliament). If there is a common pasture enough for ten cows and ten families each with one cow have grazing rights, the best overall strategy is to keep it at one cow per family. However if one family puts on an extra cow it will get less from each cow but more overall at the cost of less for each of the other families. So each family puts on an extra cow – result misery.
This is the story of ‘suboptimisation’ of local departments in an enterprise, the Prisoner’s Dilemma, Fee Markets treated as a religious imperative, parochialism and Nimbyism. (and I know the argument that The Extra Cow is a merchantilist metaphor refuted by Adam Smith. I disagree and will argue this later if needs be). Liberals recognise that we each have to take responsibility for our own actions and not expect others to pick up the bill; and that part of humanity’s strength is our capacity to build up institutions that bring greater benefits for more people than we can by strict selfishness.
Every enterprise includes this unspoken imperative – to include within its accounts what is profitable to its operations, to recognise and control the inescapable costs, and to pass on whatever costs it can to be carried by others. Example of passing on costs: spewing out unfiltered smoke from your factory instead of paying to clean it up, leaving the costs to the community or others. Another example: letting some schools recruit the most able (or if not so able most tractable) students and making others carry the cost of ‘dealing with’ the remainder.
Parochialism is when local action says hang the costs we cling to local benefits the costs to others being what they may. Localism must be different – encouraging and sustaining enterprises and organisations close enough to peoples lives to avoid the fate of the dachshund, while taking on board the need to deal with the wider costs without indulging in pass-the-parcel acts.
To translate ideas like this into actions we need concepts such as ‘Requisite Variety’. That takes me into my specialist field of Soft Systemic Analysis, so I will stop this post here before it gets too long.
I do believe we as Liberals have some very powerful ideas and tools to hand (including realistic market policies) but we need to be clear on what these tools are and not get seduced by Market Romantics.