Business People Dangerous When It Comes to Politics

Banal Business Naivete

Stephen Franks
February 14th, 2015

Few business people are good at democratic politics. They expect what works in business to work in democracy. They’re frustrated by the messy necessity to maintain a working consensus, by multiple conflicting objectives, and by the unreliability of delegates.

They think that if only the right people were in charge, the best structures and systems would be like those in business, where everyone accepts single prevailing decisions from nominated rulers, and he who pays, rules.
Business people who get embroiled in politics commonly hate it so much they eject before they flame out. Those who survive and learn may be small in number but they are among the best we have, and we owe them a lot for their patience.

Many good business people are equally hopeless in assessing policy. I could not count the number of times I’ve heard the idiocy that the Resource Management Act ("RMA") is a good law, with nothing seriously wrong with it except how it is administered by council people who are stupid or wrongly motivated. These business defenders have no idea that they’ve just explained exactly why the RMA is  so badly conceived and written as to besmirch the rule of law.

Good law is drafted by wise sceptics about human nature. It remains predictable in effect despite attempts to distort it.

They’re misled by objectives. In business, if you can get your objectives clear, and set them out for your staff, much of the work is done. But the promoters of all law recite noble objectives, usually purposes we can all agree on.  The key problem in both policy and law-making is the unintended, often the application of law for purposes never thought about.

What distinguishes bad law from good law is simple. Well designed and drafted law works whether or not ‘idiots’ are in charge. It is predictable because it limits what rulers can do. It is very carefully  designed knowing that people of malign intent will try to misuse any law. Frequently they will have power. Good law is drafted by wise sceptics about human nature. It remains predictable in effect despite attempts to distort it.
The RMA is set up instead to reflect the shifting fashions of ruling sentiment from time to time. It is therefore specially handy for those who like to claim they are acting in the interests of others, a common excuse for calculated abuses of power.

In many respect the RMA does not qualify as part of the rule of law. It enables decision-makers to dress up their aesthetic, spiritual, class, social and economic prejudices in complicated processes. They look legal, but they demean the reputation of law. If you can’t generally decipher in advance from a provision what you can and can’t do and how the rights of others will affect your plans, it is not law, it is just an instrument delegating decree powers.

Those who framed the RMA deliberately excluded normal rule of law certainty and predictability. It has taken 20 years for business people to learn that it must be judged on how it works, not on its claims to noble purpose. . . .

This faith based policy development by business reminds me of the business elite of Britain on the Euro.
Twelve years ago Britain was consumed in deciding whether to adopt the EU common currency. Gordon Brown decided not to join, against the wishes of his PM, Tony Brown, and much of the UK elite, including the Confederation of British Industry and other business leaders. This Guardian article talks of the snobbery that divided the two sides.

On the anti side with Brown were a comparatively few hard-nosed experts who demanded analysis. They pointed out that most Euro support was hope – a half-baked conviction that it was safer to be with the big battalions, whether or not they were right. Brown had Treasury support, but more importantly he had on his side the mass of his electors,  though much of the TUC and Labour leadership was on the other side.

Ordinary people had an intuitive suspicion the euro would not end well, to their cost. And so it has proved for the poor in many countries whose leaders fell in with the elite Project. The Euro was sold on a combination of ”bigger is better” fear, and the elite’s faith in their superior purposes, not careful calculation. . . .