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The Rise of the New Right and the Attack on Planning
This book is about why we need to plan collectively for the future in the face of major challenges such as climate change. Who would think differently? Why would they think differently? The answer to the first question is the new right: a radical movement of thinkers whose ideas have come to dominate politics and political economy around the world. The answer to the second question is that these thinkers have argued, with considerable success, that planning is both impossible and a fundamental threat to freedom and the ânatural orderâ of the market.
There is nothing natural or inevitable about our failure to plan for the future, especially in the face of major challenges which clearly threaten our safety and security. Rather, âweâ have been convinced that planning is too difficult, too costly or counterproductive, that our politics and institutions inevitably inhibit thinking about the long term, and that human beings are hard-wired to short-termism. There are many reasons for such thinking, as discussed in the next few chapters. But at the centre of this planning pessimism has been the war against planning waged by neoliberalism. We didnât just lose faith in the idea of planning. Faith was stripped from us, as a result of a sustained assault on the possibility of planning.
In order to understand how this happened, we need to understand the arguments these thinkers made and continue to make, why they are so critical about planning, and the influence of these ideas. This chapter considers the new rightâs attack on the idea of planning, focusing on economic planning. The next chapter focuses more specifically on the new rightâs arguments against urban and regional planning. But we start with a reminder of what happens when we fail to plan, and how the new rightâs antipathy to planning has led to some of the most significant policy disasters of the past 15 years.
Not Great Planning Disasters, but Great Policy Disasters
Itâs important to recognise that pessimism about planning hasnât just come from the new right. In his well-known âpathology of planningâ, Great Planning Disasters (1982), Sir Peter Hall recounts the histories of five âgreat planning disastersâ and two ânear-disastersâ, and analyses the decisions of the politicians, bureaucrats, and community activists involved in them. Although Hall states that his focus is town and country/urban and regional planning, as quite a few commentators have noted, many of his case studies (such as Concorde, the Sydney Opera House, the third London airport, and the Channel Tunnel) actually represent general challenges such as project planning, forecasting, and implementation, rather than issues that are unique to town and country/urban and regional planning.
Hall suggests that a common problem in these planning disasters were forecasts that turned out to be misleading. As a result, he pessimistically suggested that: âAbove all, because of the great uncertainty inherent in nearly every planning decision, the golden rule remains: do the minimum necessary, and leave tomorrowâs decision for tomorrowâ. (Hall 1982, xxvi). Uncertainties in forecasting are certainly real, and since Hallâs book there has been an increasing amount of literature on forecasting, scenario planning, uncertainty, and complexity (uncertainty is discussed here in Chapter 3). But if we consider the most significant policy disasters of the past 15 years or so, what stands out is not inaccurate forecasts but ideology (and one ideology in particular) and its denial of uncertainty. In other words, not planning disasters, but disastrous failures to plan.
What the Academic Literature Tells Us about Policy Failure â and What it Neglects
Many government policies and programmes encounter problems. Some fail. The focus here is not on the regular difficulties in policy-making and implementation, but on larger strategic failures. Perhaps the most famous study of policy failure is the one conducted by Irving Janis, a research psychologist from Yale University. Janisâs Victims of Groupthink (first published in 1972), developed the idea of âgroupthinkâ as an excessive form of consensus among members of elite, tightly knit policy-making groups. (The term was actually created by William Whyte Jr in 1952 in an article in Fortune magazine; Whyte 1952). To Janis, groupthink exists because members come to value the group and their membership of it more than anything else. The results can be devastating: a distorted view of reality; excessive optimism producing hasty and reckless policies; and a neglect of ethical issues.
The idea of groupthink has been used across organisational studies, social psychology, management, strategy, marketing, and military and strategic studies. Perhaps surprisingly, however, explicit study of policy failure remains a comparatively small field within political science itself. Exceptions include Paul 't Hartâs work (for example, 't Hart 1990; Bovens and 't Hart 1996), who builds on Janis; King and Crewe (2013), who catalogue three decades of big failed projects in the UK; and a 2015 special issue of the leading journal Public Policy and Administration (2015). Like King and Crewe, Dunleavy (1995) sees the UK as particularly prone to policy disasters, in part due to an incomplete set of checks and balances on executive power, and a lack of institutional memory caused by an almost never-ending cycle of administrative restructuring and reform. Flyvbjerg, Bruzelius and Rothengatter (2003) equally point to the âoptimism biasâ behind many major project failures. Further, there is the literature on public policy implementation studies including failures in implementation, starting with Pressman and Wildavsky (1973); also Bardach (1977). As noted later, however, one group of thinkers who definitely did have a clear argument about government failure was the new right.
What is somewhat neglected in the policy failure literature is ideology, particularly its role in creating and sustaining groupthink and the wilful disconnect between policy and reality. Ideology is a way of narrowing down and organising information in a self-referencing and self-reinforcing manner (for example Connolly 1967). Of course, there are many factors that contribute to failures to plan (Chapter 3 considers a range of reasons why we struggle to think about the longer term). But perhaps the most fundamental factor is the refusal to accept that planning is necessary, especially in cases where ideology has already persuaded policy-makers that things will work out as they believe they will.
Three Strategic Policy Failures
This can be illustrated by briefly reviewing arguably the three biggest policy failures in the US and UK in the past 15 years â one military/strategic, one economic, and one political/strategic.
The Invasion and Occupation of Iraq
In one of the best and most alarming accounts of the âfiascoâ, Thomas Ricks (2006) details how planning for the Iraq war was mismanaged by both the Bush administration and the US Army. Ricks argues that the invasion of Iraq âwas based on perhaps the worst war plan in American historyâ, an incomplete plan that âconfused removing Iraqâs regime with the far more difficult task of changing the entire countryâ.
Essentially, there was no coherent strategy (let alone a plan) to handle an occupation, and the planning that existed was based on highly questionable, extremely optimistic assumptions. The administration consistently âbest-casedâ the subsequent cost and difficulty of occupying the country, and this blinkered outlook resulted in a failure to plan for the realities of the occupation and a failure to allocate sufficient manpower and resources. Identical messages come out of the comprehensive RAND analysis of the disaster (Bensahel et al. 2008). There was planning by multiple agencies, but: âsenior policy-makers throughout the government held to a set of fairly optimistic assumptions about the conditions that would emerge after major combat and what would be required thereafter. These assumptions tended to override counterarguments elsewhere in the governmentâ (Bensahel et al. 2008, xviiâxviii).
Actually, there was plenty of planning and expertise regarding how to occupy Iraq after the invasion; the problem was that it was ignored for ideological reasons. The Bush White House routinely side-lined military, diplomatic, and Middle East experts. Defense Secretary Donald Rumsfeldâs determination to conduct the war with a light, fast force, and the acquiescence of General Tommy Franks (as Commander of U.S. Central Command and so the invasion) in this, had crippling consequences for the American militaryâs ability to restore law and order in post-invasion Iraq. The projected costs of the war were kept down for political reasons, and it was claimed (by Paul Wolfowitz, Deputy Secretary of Defense) that the war would effectively pay for itself through Iraqâs oil reserves. Infighting between the State and Defense Departments, between civilians at the Pentagon and the military, and between the military and the Coalition Provisional Authority (CPA), also severely hampered the making and execution of policy.
Although the invasion and occupation are often characterised as led by neoconservative geopolitical thinking, what is less appreciated is that it was a neoliberal project (the terms âneoconservativeâ and âneoliberalâ are discussed further below). Neoliberal ideology directed the hapless CPA in its efforts to introduce free markets, privatisation and deregulation into a war-torn Iraq (Chandrasekaran 2007; Dodge 2010). The assumption seemed to be that introducing free markets would lead naturally to a stable democracy. This reinforced Rumsfeldâs reluctance to acknowledge a growing insurgency and to adjust, and allowed the country to slip into chaos.
In December 2002, Mitch Daniels, then the director of the Office of Management and Budget under President Bush, estimated that the costs of war with Iraq would be $50 to 60 billion. Perhaps the most comprehensive (but still probably conservative) estimate of the long-term costs of the war in Iraq is captured in the title of the 2008 book by Joseph Stiglitz and Linda Bilmes: The Three Trillion Dollar War. Adding macroeconomic costs and debt interest payments, the cost rises to $4.5 trillion. The UK also spent about $14 billion in Iraq from 2003 to 2011.
Estimates of casualties from the invasion and occupation of Iraq, particularly from the subsequent insurgency, sectarian violence, and increased criminal violence, range from 150,000 to 460,000. More disputed estimates, such as the Lancet study (Burnham et al. 2006), which also includes varieties of non-violent deaths through for example poorer access to healthcare, put the number as high as 650,000.
The Global Financial Crisis
âWhy did no one see it coming?â, Queen Elizabeth II is reported to have asked academics at the London School of Economics in November 2008. Eight months later, Her Majesty got a three-page answer from the British Academy, including: poorly understood complex financial instruments and how they had systematised risk; psychological factors including denial; dangerous incentives; and a failure to understand the financial system as a whole (Besley and Hennessy 2009). But this reply also noted that the authorities charged with managing risks in the financial system lacked some required instruments because of a pressure for lax regulation.
Why was there this pressure? The reason can be found in neoliberal arguments and their influence on mainstream economics, particularly its New Classical variant. According to this way of thinking, there was no need to compel banks to have sufficient reserves, to plan and be prepared for crisis, because a major crisis was impossible (this is despite the fact that there had been 124 systemic banking crises between 1970 and 2007; Laeven and Valencia 2008). Crisis was impossible because many mainstream economists assumed that the economy is self-correcting and so needs little intervention to function effectively or safely.
Specifically, this was because of influential ideas such as Eugene Famaâs Efficient Market Hypothesis (Fama 1970), which suggested that stock market prices correctly reflect the information available to the market and so there is no possibility of a bubble (a systematic over-valuation of stock market prices). Fama worked at the economics faculty at the University of Chicago which gave its name to the Chicago school of economics, a leading neoclassical school of economic thought and critical to the development of neoliberal economic thinking more broadly.
Ideas such as these were at the root of the âGreat Complacenceâ (Engelen et al. 2001), which supported deregulation of the financial sector as well as many other parts of the economy since the 1980s. In the US, the repeal of the Glass-Steagall Act in 1999 (passed after the Great Depression of 1929, which had prohibited banks from investing in stocks in order to prevent recurrences of the disaster), meant that financial institutions went on an orgy of credit creation, enabling purchases of trillions of dollars backed by defective mortgage-based securities. In both the US and UK, banks dispensing mortgages took on more and more risk to increase their short-term returns, hiding risks through sophisticated financial instruments (so-called âsecuritisationâ). Yet in spite of the crisis, the top economic journals and schools continue to promote many of the assumptions that were at its roots. Indeed, Eugene Fama was (jointly) awarded the Nobel (actually the Royal Bank of Sweden) Prize in Economics in 2013 for his work. And we are racing towards yet another private debt crisis (Graeber 2017).
In addition to the immediate costs of bailing out the banks (in the UK, ÂŁ289 billion in up-front costs and ÂŁ1,183 billion in wider government loans and guarantees), the crisis has caused an ongoing output loss equivalent to between $60 trillion and $200 trillion for the world economy and between ÂŁ1.8 trillion and ÂŁ7.4 trillion for the UK (Bank of England 2010). Assuming that such a crisis occurs every 20 years, the systemic...