Labor shows hypocrisy in partisan political appointments

In one sense, Labor should wear some flak for its hypocrisy in raging against the former Coalition administration appointing Liberal-aligned candidates to supposedly independent positions, only to do the same themselves in government.

Yet, the appointment to the RBA board of two union-aligned candidates was a stronger example than the Productivity Commission and probably provoked less of a backlash.

After all, the Productivity Commission wields institutional power, not political or legal authority. And arguably, its importance as an institution has unfortunately waned since its inaugural Chairman, Gary Banks (now a CIS senior fellow, among other roles), retired a decade ago.

At one level, as has been increasingly clear, the Labor party seemingly wants to fundamentally change the nature of the Productivity Commission. In fact, you could go further and suggest that the Treasurer wants to fundamentally change how we view productivity itself - among other things.

At the heart of that is a vision of the economy and future of Australia that is fundamentally at odds with the free market, anti-government intervention ethos embedded in the Productivity Commission (inherited from its predecessor institutions back when the then Industries Assistance Commission replaced the old tariff board).

For all its talk of a new way of thinking about economics, to the extent Labor is actually doing anything, it's harkening for a return to the past.

That nostalgia is for an economy whose guardrails and priorities were strongly influenced by political institutions, interest groups and rent seekers - including Parliament, but also trade unions - rather than markets. The claimed justifications are numerous - inequality, climate change, slow wage growth and fairness feature prominently - but the solution is always the same. More government.

One might be struck by the ironic disconnect between rising distrust of government on the one hand and its increasing size and power on the other. However, the concern is not just one of more government, but how we are governed.

The relevant conceptualisation of 'government' here is less about representative political institutions and more about a governing class of experts wielding power through executive government agencies, the public service, and independent bodies (such as the RBA).

It even extends to supra-national institutions like the World Health Organisation or the bureaucrats of the European Union. Perhaps even the Productivity Commission in some respects.

At issue then is the proper role of experts in a democratic society. And, as the extensive role played by the various chief medical officers around the country during the pandemic showed, it's far from an academic query.

As my colleague Peter Kurti made clear in a recent publication, "Authority, Expertise and Democracy: Should those who know best rule the rest of us?", there is an inevitable tension between the need for expertise to navigate increasingly complex problems and the balancing of competing interests that arise when making policy decisions.

To be clear, the problem isn't expertise in general or even the delegation of decision-making to experts in appropriate circumstances. Problems instead come, for example, from politicians hoping to avoid the consequences or challenges of making decisions by abdicating authority completely to experts.

It also comes from people using their status as experts to escape scrutiny for their advice, or advance their own preferences and agenda beyond the scope of their expertise. As Kurti analogises, those with specialised engineering knowledge should be making decisions about technical specifications for a bridge, but elected representatives should be weighing up the factors to determine where the bridge is placed.

The problem has become particularly acute in the United States. With Congress seemingly paralysed in many ways, both Republicans and Democrats have sought to use the executive authority of the President and other agencies to bypass the gridlock.

It has fallen to institutions such as the US Supreme Court to hold the line against overreach. For example in the recent case West Virginia v EPA they ruled that executive agencies can't use somewhat vague delegations of authority in statute to implement major policy changes.

If you don't like the politics of the EPA case, you might like to consider the operation of the robodebt scheme instead.

The point is that, as polarisation has increased, partisans on both left and right have increasingly sought ways to implement a broad agenda without building a plurality of support among those elected to represent the citizens.

This is perhaps less stark in Australia but it's hardly unknown. A popular method has been to delegate policy formation to ideologically aligned expert reviews. The politicians then only need follow the supposedly independent and authoritative advice to implement policy. The big risk of this approach is at the same time as we are seeing the rise of the expert, expertise itself is becoming aligned with ideology, not with evidence. Something that has become only too apparent at times in academia.

This is a really important - and particularly unwelcome - development. We can see it too in the blurring of facts and opinions in journalism and elsewhere; the rise of the 'fact-checking' industry being one good example.

Recent proposals to form government 'disinformation' boards and committees are another. It would be inevitable that such institutions would almost immediately become as corrupted by politics, as fact-checkers already have.

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Our inability to be able to agree on a basic bedrock of facts and scientific effects doesn't just make polarisation worse; it actually makes consensus all but impossible.

Where all this leaves the appointment of a qualified, but potentially politically-affiliated, candidate to head the Productivity Commission is far from clear.

What is clear is that should the body become a mouthpiece for the Treasurer's vision of a new economic settlement, its value as an institution will be greatly diminished.