| Talk, Talk, Talk ... Do pundits like me have any effect on policy? |
By Herb Stein
Having reached an advanced age, I am retiring from my duty as regular moderator of S LATE's "Committee of Correspondence." On this occasion I am moved to reflect on half a century--51 years, actually--of producing talk about economic policy. What is such talk for--and, especially--does it influence policy? Economic-policy talk runs a wide gamut, from unintelligible articles in learned journals to unbelievable television spots in political campaigns. I confine my remarks here to the part of the gamut in which I have been active--which, I trust, has been the more intelligible and believable part of the range.
For 22 years I have been writing little essays about economic policy--about eight a year--in the Wall Street Journal. For six years I wrote a weekly syndicated column, and for six months I have been conducting a panel on policy issues for S LATE magazine. Such writing--opinion pieces, editorials, and news analyses in papers and magazines of general circulation--is the most common form of policy talk in America. But I do not think of it as mainly part of the process of determining economic policy. I think of it as an exercise in "economic-policy appreciation."
| I use the analogy of courses in music appreciation given in colleges. The students in these courses are not going to become musicians or composers. What goes on in the courses is not going to affect the output of actual composers--most of whom are already dead, anyway. And yet, the courses are useful. They help interested students to understand and appreciate an element of the world they live in, and thereby enrich their lives forever. A less high-flown analogy is the sports columns in the newspapers. I read those columns about games I have never played and will never play, about games I will never see in person, and mostly about games I have not seen on television. And yet, I like to know what is going on in that world and to be able to discuss it with my barber and my economist colleagues.|
So, I think, it is with journalistic writing about economic policy. There are some people--not as many as are interested in sports, but still a large number--who are interested in economic policy because they believe it is a major part of life in America. They see it as an arena in which there is conflict among ideas and among identifiable personalities, and so they like to read about it. At least, there are enough of such people to make publishers willing to pay (a little) to get such writing.
| I think that over the past 50 years, the quality of journalistic writing about the economy and economic policy has greatly improved. Fifty years ago newspaper writing about the economy was mainly in the hands of either the people who covered Wall Street or the people who covered politics. Then we began to get some reporters who, although without any formal training in economics, tried to learn about it and to write about the economy from that standpoint. I used to complain that such writers worked by telephoning and getting short quotations from a little list of economists who all had visible political identifications. This situation has changed. There are more journalists who have studied economics, and they consult a wider range of sources. Also, more papers regularly publish articles by professional economists. So I think that journalistic writing about economic policy has improved, as journalistic writing about sports probably has, too.|
But whether this talk influences policy is another question. I don't have any statistics about this, but I am sure that far fewer people read editorials or columns about economic policy in the Washington Post than read Ann Landers' advice on life's human problems. The evidence about what Americans know about economics does not suggest very close reading. The number of people in Washington who know the Redskins' win-loss record must be enormously larger than the number of those who could come within hailing distance of knowing the unemployment rate.
| The talk on the op-ed or editorial pages hardly adds up to discussion, if discussion means the confrontation of differing views, disciplined by rules of logic and evidence and leading either to a conclusion or to agreement that no conclusion is possible. Some papers have representatives of different views--generally labeled "liberals" or "conservatives"--on their op-ed pages but these representatives rarely confront each other or even write about the same subject. The television talk shows make a point of confrontation, but those confrontations are too brief and superficial to be significant. I think that the exchanges on S LATE's "Committee of Correspondence" have come closer to being discussions, with fairly extensive presentation of facts and arguments from different sides. But at the end of each week I have usually felt that we are only beginning to get to the heart of the matter. Sometimes I think that instead of a weeklong discussion of an issue we should have a yearlong discussion of it--but I would not want to moderate that.|
I think that most people--even those who read the editorial and op-ed pages--do not want to encounter opposing views. They want a good expression and confirmation of the views they have--or would have if they thought about the subject. I can see that in myself. I rarely read the columnists I know I am going to disagree with. Life is too short. I don't know anyone who reads the Washington Times who is not a conservative. Probably almost all readers of magazines with pronounced ideological or partisan slants share those slants. They want to be massaged, not to learn.
| In all my years of writing opinion pieces I don't think that I have ever received a letter from a reader who said that I had changed his mind. I get some letters--a few--from readers who say they agree with me. Many of them say not only that they agree with me but also that they had had the same thought 10 years ago and had written a 50-page essay about it that they would like my help in getting published. Some write to disagree with me, often violently. But I don't remember any saying that I had changed his mind.|
When I was in the administration as economic adviser to President Nixon, I, of course, read a good deal of journalistic writing about economic policy. I don't think that I felt that I learned anything about the facts or about the analysis from that. And yet, I believe that this journalistic talk had some effect on policy. The decision to impose price and wage controls in 1971 is an example. In the months before August 1971, the leading newspapers, magazines, and television news shows were full of pleas for "some kind" of controls. That did not convince me that the controls were desirable. But it did create the impression that the people "out there" wanted controls. And if I got that impression it must have come more strongly to the president, who read such talk every morning in his daily news summary and for whom opposition to the controls was not quite so much a religion as it was to me.
| A different kind of talk, more purposeful and persistent than newspaper articles, may have a greater influence on policy. That is the talk, in the form of pamphlets and books, emanating from what are loosely described as "think tanks." One distinguishing feature of a "think tank" is that, unlike a newspaper or a magazine, it makes little attempt to sell its product but is happy to give it away free or at a greatly subsidized price.|
For 22 years, from 1945 to 1967, I was a researcher and draftsman for a group of businessmen, the Committee for Economic Development. Each year the committee issued four or five pamphlets giving its view on current issues of policy. A statement on budget policy issued in 1947 exemplifies how such talk can influence policy. I shall not elaborate that policy here but only identify it as proposing that the condition of the budget be judged by a calculation of what the surplus or deficit would be if the economy were at full employment. That idea gained considerable currency in the 20 years after it was put forward by the CED and, although now much diluted, still plays a part in thinking about budget policy.
| How did this influence come about? It was not simply because the basic idea was sound--as I believe it was. Several other factors were important. The proposal met a need--to bridge the gap between the naive Keynesianism with which the economics profession was infected and the balanced-budget fetishism of the business community. The fact that the proposal came from a group of businessmen lent it credibility. People are always willing to believe you if you say something that seems to be against your own interests or your own conventional dogma. Also, after the initial statement in 1947, the committee issued a statement almost every year for about 20 years applying the principle to the conditions of that year. So there was a cumulative educational effect.|
I could give other examples of influence flowing from the work of policy-studying institutions. The series of studies of taxation produced by the Brookings Institution in the 1960s and 1970s, and the studies of regulation produced by the American Enterprise Institute in the 1980s and 1990s, seem to me to have been effective.
| Two qualifications have to be noted, however. Each year that I was at the CED, the president of that organization would report to the board of trustees on how influential that year's statements had been on that year's government's policy. But when I was in the government, I never found the committee's recommendations on that year's problems to be valuable or effective. I thought--and still believe I was correct in thinking--that we inside the government knew more about the issue of the day than any outsiders did, not because we were smarter, but because we got information earlier and worked on it more intensively. The contribution of the think tank, when it is at its best, is not to solving the day's problems but to developing and promulgating a set of enduring principles for thinking about those problems.|
In recent years the number of think tanks has greatly increased. We are a rich country, and can afford several. Many of these institutions are highly specialized, not only in the questions they study but also in the answers they give to those questions. I fear that they will depreciate the value of think tanks in general, conforming to Frank Knight's Law of Talk: Bad Talk Drives out Good.
My sainted Professor Knight also said that democracy is government by discussion. I would amend that to say that democracy is government by trial and error. The contribution of discussion--of talk--is to expand the range of options from which trials may be selected and to speed up the detection and correction of errors. I think talk has done that. But, anyway, talk about public policy is one of the pleasures of a democracy, and that's a good thing.
|Herb Stein, a senior fellow at the American Enterprise Institute, was chairman of the Council of Economic Advisers under Presidents Nixon and Ford. He is a member of the board of contributors at the Wall Street Journal.|